Can a seller resell items in trademarked packaging provided by the original customer who failed paying for it?

You should speak with a qualified trademark attorney about the doctrines of passing off, reverse passing off, and first sale or exhaustion.

NO. You can resell the ammunition but not in the trademarked boxes from the third party. If you sold the ammunition in the third party's boxes (say at a discount) you would be stealing a sale from the third party. Your recovery cant be from the losses of a third party.

I would be worried and would see what I could do about repackaging.

No. This fact pattern is odd. Typically the manufacturer of goods (here the ammunition) provides the goods in its own packaging - showing the manufacturer's trademark on the package. The customers purchase these goods based on past experience with this brand of merchandise. Here, the typical case is not followed. We have three parties - and it is unclear who made the ammunition, and unclear what trademark is being used. Sell the ammunition without using the trademarked packaging art - as you are likely not authorized to use that art.

It is not clear from your statement of the facts whether the "trademarked packaging" you were provided is the same packaging that the ammunition manufacturer uses to sell their ammunition with their trademark. Who owns the trademark? The ammunition manufacturer? Your customer? Your customer's customer? Or some other unrelated party? Furthermore, it is not clear whether or not the ammunition manufacturer has trademark rights or not (presumably yes), or whether you are the ammunition manufacturer and you sell it generically for private branding. I will assume for this analysis that the "trademarked packaging" is marked with "Private Brand X" and the ammunition is actually manufactured and sourced from "Federal Brand". This presents at least two issues. First, Federal is going to have a trademark infringement action against anyone repackaging their ammunition and selling under some other brand name, e.g. Private Brand X, unless they have a license from Federal to do so. The second issue arises from a change in the factual scenario. Assuming that the ammunition is actually generic and not branded (*i.e.*, you are the ammunition manufacturer and you private brand your ammunition) and that your customer's customer owns the trademark on the trademarked packaging that was provided to you by your customer (highly likely), then your customer's customer may have a trademark infringement action against you. Furthermore, as you note there are UCC remedies, one or more contracts that have been breached and multiple parties involved in a possible dispute. So, you would be well advised to seek the advice of counsel before trying to minimize your losses.