He was an asshole for jumping inbetween you two like it was some game. It was extremely immature of you to return her cd with a cut in it. What did that accomplish? She already knew that you didn't like her so what is the point in pushing it?
I agree. That does sound pretty flakey. How would the cop give you $2,000 without having you sign anything or having any kind of proof that this actually happened?
If you are telling the truth, then that check is going to bounce.