I have a lot of experience in this area, and have lost a lot of time and tears because of people like this guy you described. You will be more than correct to simply say "thanks, but I have other obligations, good luck on your project," and move on with your life. You don't even owe him that much, but at least you will let him know it's not okay to contact you about continuing. Don't be afraid to stand up for yourself, you're absolutely right that these conditions are wrong and that you deserve to be paid for your time and effort.