I'd leave feedback, report the facts, then include the quote at the end.
When he moans and groans about it, just say, hey, if you think you've treated me fair, then it's not negative feed back.
I agree. It's one thing try and work something out it's another to hold you hostage with negative feedback. Besides I don't believe neg feedback really hurts a buyer much anyway. I would warn people not so much that he might be temperamental, which he obviously is, but that if there is a dispute that he will use feedback against them if things don't go his way.
Some sites will not allow you to "quote" correspondence so I would check first.