Have they denied washing it?
I'd try to work it out with the buyer first, which I presume you've already done. I'm also presuming that it now cannot be resold due to the smell. If that's the case, I'd try fighting it but I wouldn't cross my fingers on winning. I'd also put the buyer on the black list.
He denied, debating if I want to open a case now or not, like I said I don't know think its really damaged, and its still sellable---However, he was kind of an ass about the return and claimed it wasn't authentic, although he didn't open a case.