Definitely report her and file a complaint with e-bay and let them dispute it with her. Because of the circumstances, I would leave a negative feedback, too, but be sure you respond with why you did. I have shopped e-bay for 5 years and never have left a negative. I would have in this case.
Bid on it again under a different identity or have DH do it. Maybe you will win again. If you win it for less than S & H and she pulls it again, report her again, and e-bay will take care of it. Shame on her.