what i would do in this case:
1. tell him he got a hell of a deal, you were asking for more, settled for much less.
2. remind him 'this is craigslist, i'm not trying to screw anyone over, but things are sold as is and sales are final'. apologize that it didn't work out, and if he was iffy on the purchase, he probably should have checked it out himself in the first place.
3. a) tell him to resell it himself on craigslist and he'll get his money back, or more, for it.
3. b) tell him you are doing him a favor and you'll allow him to return it (he does the leg work to drop it off of course) and you'll give him $100 for it. 'THIS IS MY FINAL OFFER.'
*now you either sold it, or you got it back and made $100 on it, in which you can finish your project you started, or you can sell it again.
If you were in the business of building smokers for a living and this was someone who would want a refund, I would say bite the bullet and buy it back. If however your a joe shmo like myself who starting building it for the challenge and pride of something you built from scratch being better than anything you could purchase, then tell him sorry Charlie. If he continues to push it, block his number. IF he shows up to your house, then you have a couple recourses....whoop his silly butt or call the police. Most people nowadays are internet/telephone tough guys. They like to make noise, but do nothing to back it up. Its the guy that says 'I'll be right there" and hangs up you need to worry about...LOL
Good luck man, if I would have seen the ad I would have jumped all over it for $200!