After a long ordeal and losing $150 CAD on a broken 2004 Marzocchi DJ2 for my bike, I discovered something that EVERYONE who as ever used paypal needs to know. I wrote 5 pages on paypal's dispute section detailing a sound case for why my money should be refunded. I am fully confident that if someone sat down and reviewed my case, I would win. This is not the point. The point is that Paypal, because of something somewhere in the user agreement in fine print, is not in any way obligated to back you up or even review your claim if the money in question was not for something you bought on EBAY, paypal's parent company. I found the ad for the fork on pinkbike.com, and decided to pay for it via paypal because their tons of ads brag about how SAFE it is. Paypal is there to protect you. This is a load of horse shit. If you are not using Ebay, paypal is absolutely no safer than sending a money order via the mail. Paypal WILL NOT even read your claim or arguments if you do not use Ebay. Their dispute center is basically useless. My claim was denied, my hard-earned cash taken from me, by a computer in 30 seconds because the transaction did not involve Ebay. After searching for a number to call and holding for 30 minutes, I was told by a kind woman at paypal that paypal was not responsible for my case. I actually said to her "So paypal spends millions of dollars on ads about how safe it is and how it will protect you, when it really says in fine print which it knows no one reads that it will not protect you." She said "It's true that many people are misled by this but it is clearly stated in the user agreement."
So basically stop using paypal. It's more or less a scam. I wouldn't suggest buying things on internet classifieds anymore either, since paypal was supposed to be the protection allowing you to do so.