PayPal Question - Suspicious Seller?

[Pointless Star]

I bought something off a private seller using goods and services. I didn't think much of it until they marked the order as shipped (when it didn't) and said that they would ship within the next few days. They had also asked that I confirm receipt because there was a hold on their money. I didn't confirm receipt, but just hours later I found out that the photos they sent me of the item do not actually belong to them and now I've got a bad feeling about this.

Should I wait until I actually receive the item? Or is there anything I can do now? I'm concerned about them providing a bogus tracking number or being stuck with something I didn't pay for. Any help would be greatly appreciated!