Whatever you do, stick to your guns. Giving in even a little will not help. That said, if he has legit issues you need to address them. I understand he took the vehicle but we all know that at the time of pick up many times the owner is so excited he/she doesn't really look at the car in detail. Additionally, there is a possibility that the paint has issues that were not apparent then (not saying this is the case, but there are always 2 stories and typically the truth lies in the middle).
Money brings out the worst in everyone, that said paint and body work are probably 2 of the least understood automotive issues out there especially with non-car people (people who do not actually work on cars, might like them but do all of the work writing checks).
Even for car people paint and body can be a sobering issue because "back in the day" you could get a car painted for like $300, however we forget that those cars were not all that old back than and generally didn't have 40+ years of damage and abuse. On top of that the cost of materials has gone crazy.