I think what you have written sounds perfect. I wouldn't mention anything about neg feedback/paypal yet. It is best not too make her too defensive to begin with. If she thinks you sound reasonable and aren't "threatening" her with feedback, etc. she will probably be more willing to help you calmly. I would wait and see what she comes back with before telling her how much compensation you want for the lesser model. I think it's best to see how she responds before going into any more detail.

Good luck