Well, if you have a signed contract to prove copyright breach, a simple DMCA to Envato Support will surely take the file down.
You can’t sell a coded version of a PSD template without PSD author’s permission, no matter if you buy Regular or Extended license. If you want to code a PSD from another author, you can do it in two ways:
1) Buy the exclusive rights from the author (The PSD author will give you an exclusive permission to code that PSD and all money that you earn from that coded version is yours, and yours only. The price tag for the exclusive rights varies from author to author, some will sell for a couple hundreds of dollars, some will ask for 1000+)
2) You and PSD author make a partnership, and agree to share profits from the coded version. For example, 70/30 means that you will get 70% of the earnings because you will also provide customer support, future updates for the file, etc, and the PSD author will receive 30%. Partnership is an less risky option than purchasing exclusive rights because you won’t lose any money if the file sales are poor.
Both of you should sign a contract with mutually agreed clauses that will ensure that both of you are protected from any violations in the future. In that way, if any of the parties breaches the contract, the other party will be able to take down the file by sending the contract to Envato Support. You can find some free legal documents which you can adapt to your needs over at Docracy.
I totally agree, it’s counterproductive.
Are you proficient in HTML and CSS? If you are, diving into Wordpress theming will be a lot easier for you than for other newbies out there. My piece of advice is to start with the Wordpress Codex: http://codex.wordpress.org/. It’s very comprehensive and extensive. Take a look, read some of it, get familiar with it. After that, you should probably start with a framework that has a lot of community around it, because it will be easier for you to ask questions and avoid common problems. I’m not familiar with the complexity of different frameworks, but I’m sure someone will visit this thread and point you to the right direction.
The best step for you to take next is to visit the X theme support forum: http://theme.co/x/member/wp-login.php?action=register
When you register, you can ask your question there and I’m sure they will help you. Another way of getting an answer to your question is to post a comment in the X theme comment section: http://themeforest.net/item/x-the-ultimate-wordpress-theme/5871901/comments? and the creators of the theme will answer it when they see it, so keep an eye on your comment from time to time.
If nothing of these two works, come back to this thread and I’ll guide you how to contact Envato Customer Support.