People who are having problems with Paypal, should ensure they pay through paypal through VISA. I had similar issues of paypal not paying/refunding when items not received through Ebay. Eventually i resorted to my card VISA to contest none receipt of goods or services. I filled the form in and VISA instantly took the money back from PAYPAL. PAYPAL then tried to contest with me, I stuck to the truth NONE RECEIPT OF GOODS and they ended up backing down.
Therefore to cover losses through PAYPAL to unscrupolous sellers ensure you pay through a VISA credit card.