Worth of a blog you don't want to sell?

I'm in a funny situation:
Someone desperately wants to get my domain. And I didn't even put it up for sale.

About the site's background:
I've been running a blog from and about a fairly big city (3.5 million people) since 2004 on a non professional and/or commercial basis. This means, just for my own fun and for trying things (technical/SEO/marketing) out where it doesn't hurt. I don't have ads, and (yet) I don't try to earn any money through it.
Still, I can say, it payed me back – if not in cash, I earned expertise and made contact with lots of people, got jobs.
I get a couple of requests a day to write about events, artists or whatever. I never get turned down when I ask for tickets or goodies for a drawing, and I get tickets to events without even asking.

The site developed better than I would have expected. Today the site has about 90k page impressions per month and about 30k unique visits. That's not much, but enough to keep writing.
The domain name was registered in 2001 and has a PR5 right now. It has an entry in dmoz, is linked on 6 or so articles of Wikipedia and has > 2500 backlinks on Yahoo.
The name and .com is pretty much brilliant: It's a 2-syllable not made-up word that's in a dictionary. It connects positively to urban living, culture and music. It has (to the people who know) a special connection to this city, but is generic enough to fit for at least half a dozen major cities.

So actually, it is a nice site and I don't want to sell it.

Now here come's the hook:
As I did not yet intend to seriously earn money from it, I did not register the name itself as a trademark. Who seriously does that for a blog?
Now there comes this guy who does so and started a print mag with the same name – in the same city – a couple of months ago.
Means, from now on I can't do print stuff (I would never want to) plus parties/events (that would actually make sense for me) and clothes (it really works great for that, dammit).
I asked 3 layers and they all told me, that I can't do anything about the trademarks he registerted. But also, that he can't do anything about my site. Actually, if I wanted to, I could propably sue him and take his domain (he bought .net from someone), forbidding him to use that name on the internet. That's it.
There will still be confusion about the name. I already started to keep saying I'm "blabla.com" insted of just the name to make it more clear.

Now. 1st of all, I'm kinda pissed, of course. 2nd of all: I can't do much about it. 3rd of all: The guy offered (actually he demanded) to buy my domain. The offer was a low four digit amount, which I consider inacceptable. He seems to be really wanting the domain – of course we can see, it might develop into his worst competitor, eventually stealing ad customers if I were to place ads – so I might likely negotiate to a mid four digit amount.
Not to say that this is very attractive to me, but it would be the easy way to avoid legal issues and tiring fights.

I'd be very interested in your thoughts and views about this. :)

Please remember that I can't tell the domain name or give detailed information, as we're still carrying on negotiations. ;)