For starters, one of you needs to file a claim with UPS. I thought it was the shipper, but a recent thread here told me it's the recipient. I still think it's the seller's, since he's the one who paid for the insurance, but you need to coordinate with UPS to show them the evidence, so whoever starts it, the effort is going to need to be coordinated.
I also think the evidence is on your side -- unless they took and kept pictures, they have no proof that the crate was inadequate, and the re-boxing makes it look like a cover-up to me. That's what they did when they sent me sand instead of tubes once, and they ended up refunding the sender the entire amount of purchase.
I sure hope he sent them insured.