I swear, the situation surrounding refunds has become so ridiculous, I wish I was a Reddit member, as I would have started a thread there dedicated to this debacle.
Here's the latest update and it sounds awfully similar to yours, bhatech. I also just received a call from the HTC escalation team (my original case rep), who informed me that HTC attempted to issue a refund, but it failed. Of course, she apologized profusely and stated that she reached out to the head office to have them reprocess the refund, but hasn't heard back from them yet. I thanked her for reaching out to me, but also made it very clear that it's absolutely unacceptable for HTC to drag customers along like this. The case rep apologized again and promised to contact me again as soon as she has an update.
I don't buy the "refund failed" excuse for a second. Issuing a refund via PayPal is as simple as clicking a button. I'm glad I filed a dispute with PayPal and a complaint with the BBB, as dealing with HTC's customer service and escalation teams has proven to be nothing more than an exercise in futility. After this, HTC has lost my business as well.