I recently purchased a SA Box Set on E-Bay from an E-Bay store through an auction listing (Not a BIN).
(I wont name them here though)

The listing description showed ONLY the box itself with no contents pictured, but the description noted that all contents were in like new condition.
Considering what these box sets have been selling for, I felt that I got a very good price for the set, or so I thought until it arrived.

Most of the modules have bent corners.
They are (For the most part) relatively small bends (1/4 inch to 1/2 inch), but all of the bent corners are quite obvious.
L3, S2, G1, G2, G3, and S2/G3 each have several spine creases.

L3 also has some sort of sticky residue on the front cover (about 3/4 inch around).

The Silver Anniversary Book (Story of TSR) has a two-inch long bent corner to the front cover at the upper right corner of the book.

The Errol Otis artwork page has several problems, starting with a small bent corner at the upper right and a long bent corner (one inch long) at the lower right, and another dinged side on the left side near the middle, and yet another ding along the bottom near the left corner (Front).

The seller has avowed his innocence, saying it all looked like new when it was shipped, but has offered the following:
Either a small refund, or free item(s) from the store.
Seller did not say what small refund meant in a dollar amount.

I do not know what to do here.

Even though I feel the price I paid was not high at all for a collector's box of the SA set, I do feel the cost was far too high for a set that is not so collectable after all.

The contents IMO are nowhere near "like new", as advertised by the listing description.
I have no doubt that the set is in a playable condition (Certainly) but I did not buy this SA Collector's Box Set for playing with. (Who would?)
It was intended to be an addition to my meager RPG collection.

So I wonder how much a discount I should ask for… If any.

Or, if I should send it back and demand a full refund (including shipping both ways) or if no refund comes, then back charge my Paypal account.

Or should I agree to a free item (or items) of my choosing to be shipped to me instead of a partial refund, and if so, how much value should I ask for?

Or should I ask for a partial cash refund and if so, how much?

I'd sell the box set to me, since I need one for playing with.

Other than that, you could do a lot of stuff -- obviously, you could ask for a larger "refund" amount, but that depends on how much you spent in the first place; same for the "free items." If you paid $60, the seller would be an idiot to give you $40, or even $30 back. I wouldn't expect more than 5-10% refunded -- more if the items are hideously deformed.

An Open SA box has value mainly in the L3, if that is damaged then the rest of the items would have a hard time getting $30 or so for the lot.

Sticky stuff on the cover sounds suspiciously like price sticker residue. It's probably a frankenstein, where the seller has accumulated the bits to put together a complete SA box set. Possibly they had the majority already and just needed the L3 to complete it.

I'm not a fan of haggling over partial refunds, so my recommendation would be to either accept that the price you paid for the set was acceptable (with the undisclosed wear and tear), or return for a full refund.

Of course, if the seller feels bad and offers you compensation, I would have no problem accepting that (if you decide to keep the set).

Return the item to the seller promptly, let them know you are not satisfied with the item, and want a full refund, as it is "significantly not as described."

A decent honest seller should accept that, give you a refund and move on.  If they give you any crap, get the money via a PayPal dispute if necessary.  Make sure all your communication is through the E-Bay website.