I won't touch Paypal with a bargepole. I sold an item on ebay and the purchaser paid with Paypal. I posted the item off and kept the proof of posting.
Six MONTHS later, Paypal took the money from my account saying that the purchaser was now claiming that her account had been misused. She also claimed she hadn't received the goods. As luck would have it, I'd had a clear out of paperwork a couple of days before all this happened, and I'd binned the six months old proof of posting.
I was left minus my item AND out of pocket.
Sorry I can't advise on your situation, but anytime I get the chance to have a rant about paypal I take it!