Hi Frank,
Sorry to hear of the hassle. As for response to the buyer, I agree with most of the comments above. Still, Rafed's advice was good for ways to reduce the incidence of similar things in the future (more pics from more angles, to which I'd add you could consider fewer pics of anything that's not the actual tree they'll get, and clearly indicate which pics are not the actual item), but of course no matter how much of those sorts of things you do, you will still get some amount of this sort of response. Because it's not really about how well you did with your auction, nor how honest you are (which I know to be highest caliber). It's about that buyer's response, which you cannot control, and can only minimally influence. I also agree with the suggestion about toning down your first paragraph... you can probably make the same point a little more sparsely and neutrally (e.g. "Sorry to hear you're disappointed. I think the one I sent you was the best tree. The other one that I'm selling on ebay is very similar, but not better.") But of course it's up to you how you respond, Frank.
I boil it down to this: You can't please everybody. There is after all another person involved, and you can only choose your own actions, not the other person's. I think you're spot on, so don't take their response personally. Your offer to find another way to please them is generous.
Mike central NY state, zone 5a