The concensus seems to be against the buyer. The argument comes down to Tom Sanders' point that the buyer must convey the payment to the seller. Others have said that the buyer should have known that sending cash was risky, even if the seller demanded it. My first question would be, what were the terms? Whose idea was it to send cash? I am not so quick to fault a buyer who was only following directions. The seller may bear some responsibility too.
In this hobby there do seem to be mainstream ways of transferring money: paypal and check. To ask for some other method is to go outside the norm. This puts some of the onus on the requester, which I assume to be the seller. If I asked you to pay for a bike by leaving an envelope full of cash on a park bench, and it was not there when I came to collect, I would bear the responsibility. Maybe you should have said that it sounds pretty risky, but it was my crazy idea.
Assuming that the issue of fault cannot be easily resolved, what now? Would both parties be satisfied if the buyer sends another 50% of the price to the seller (this time by more secure method)? That way the buyer has paid 1.5 times the original price, but he has the bike, and the seller has gotten 50% of the original price. They could also agree to sell it to some third party, and split the proceeds. This would be fair, but presumably the buyer wanted the bike in the first place, and it may be hard to replace. Also, the market may have been more robust a year ago, and the bike worth more then than now