I really hope you didn't do "friends and family" via PayPal, then you will definitely have no recourse.
I've privately rented rooms (not DVC) and owners ask for this method to save on fees, but I always push back and offer to pay a little more to cover their fee as it acts as a form of protection allowing me to dispute in case the deliverable is not conveyed.
That said, if the contract was no refund and you did not insure on your end, your only recourse will probably be small claims court and hope that a settlement is reached. Someone mentioned it above, it's like (but slightly different from) buying a non-refundable hotel stay for a discounted price.
So recapping:
1) File disputes with PayPal (as long as you didn't do F&F), file dispute with CC.
2) Concurrent with #1, write a proper demand letter (certified mail, return receipt) stipulating the refund amount, date you need it by, action you will take if failure to act.
3) File case with court/small claims court -- this gets tricky if you're in different states, consult a licensed attorney in your jurisdiction.
I realize the owner gave you a verbal/emailed promise, so if you're still in good graces with them, do let them know that, in order to preserve your rights, you are doing the above.... and tell them to send the refund they promised and you'll call off the hounds.