edit: I also thought since they didnt take PayPal something was sketchy...
Right - it's not a huge red flag but the fact is that if you pay with PayPal a) it's pretty easy to get it reversed in case of fraud, and b) if you paid for it with a credit card and not your balance or checking you can also go to the credit card company and get it reversed and PayPal almost never fights it. Normally if something were borderline I'd say, well, make sure you pay with a credit card and Paypal and you're covered but in this case once he has your check/money order you're pretty much out of luck.
Another red flag is that he only has the one big item for sale and isn't a regular seller.
Another red flag is the 5 day listing. If you're selling something expensive, you want as much exposure as possible. 7 days is free. 10 days is only another 40 cents. You're crazy to list a multi thousand dollar item and use a 5 day auction... unless it's a fraud and you want to turn it over as fast as possible before somebody's realized their account has been hijacked!
If somebody were devious they would create an eBay account with some free email address, bid a million dollars on the listing, and thereby prevent somebody from getting scammed. You might want to bid at the last minute so that he can't cancel your bid.
(I'm an eBay PowerSeller, incidentally)