Go to the order summary page and void the transaction. After that, the item will become available in the marketplace again.
There are a number of reasons why the payment didn't come through. The buyer could have changed her mind in the last minute, or the page/connection was closed on the PayPal side before the transaction was complete.
Feel free to ping the buyer if she is still interested in the item. If the buyer says no or you don't get a response, just go ahead and void the transaction so someone else can buy your item!