Thanks guys.
I did lodge a dispute with PP a couple of weeks back and it has been resolved. As bad as I feel for doing this, I wasn't left with much option as CBP didn't really put any effort into chasing USPS for some answers. I've spent several hours on the phone to both Australian Customs and Aust Post and neither departments could find any record of the parcel arriving in the country.
Brian, I understand your point of view and this is why I never ask for a parcel to be declared as anything but it's true value.
Also I think as a matter of due diligence, shipping internationally should at least be done via registered post, where a signature is required. (small value packages could be an exception. NB: this order was USD$580 ex shipping)
Btw, I've just noticed something. CBP charged $42 for shipping. From experience, should this not be at least registered post??
FYI: the "Gift" concession has been legislatively removed for sometime now, so declaring that an item is a "Gift" has no Tax/duty advantages.
http://www.customs.gov.au/site/page.cfm?u=5653