not really sure what happend i wasnt expecting him to be in there and kinda did scare me so i paralysed it and he fell off the edge and died ...

I hope he does respawn would make an epic pet through the use of the command spell

(also i cant ressurect the dead Im playing on a 360 and dont have SI installed going to do that once i reach level 30 to see if the difficulty will have changed )

I can′t tell if boss bandits respawn but I think they do. However difficulty can be manipulated via the Difficulty Slider as you probably know. Remember that the monsters also level up when your character does, so it doesn′t necessarily gets easier because of that.

Not at home to check right now, but on the talk page for Greenmead cave over at UESP, someone says s/he does

I"ve never see the big guy respawn. I'm pretty sure the answer is no. But you can test. Just leave that zone wait for over three days then go back and see if it's there.

However, without mods, there is no real battle. It's only as powerful as it's little friends.