Seller says that Paypal is holding my payment for 21 days...

[Scissors]

The payment has cleared, it's just on hold. The seller is not allowed to make you wait 21 days for the payment to be released. From the Selling Practices Policy:

If PayPal places a temporary hold on payment received for an item you sold, you're not allowed to hold shipment, pending the release of those funds (after 21 days)

As others have said, he's also not allowed to request positive feedback before shipping, that's feedback extortion.

Edit: Here's a link to the Selling Practices Policy:

http://pages.ebay.com/help/policies/...practices.html