Jim,
There was an article in the Times not long ago which described a group of self-described Ebay vigilantes who try to spot fraudulent auctions and scare the unwitting bidders away. Amazingly, ebay opposes their efforts, and if I recall correctly, have even threatened their status as ebay members, all for doing what your instincts are telling you to do.
I say, contact the would-be buyer as soon as possible.
As far as whether or not fraudulent ebay auctions are out of control, I have no idea. My father is a total technophobe, still uses a non-electric typewriter, and he's constantly warning me about the things he reads about auction fraud-he thinks its endemic, he'd probably even go so far as to say that more than half of all listings are fake. But I always remind him that I never bid very much, and I've never heard of someone listing an album they don't actually have, so the worst thing that happens are poorly graded LPs.
And, I remind him that its high end items like vintage guitars or "new" electronics that tend to be fraudulent, not jazz LPs.