As Meni mentioned, PayPal unfroze my account about 6 months after freezing it.  I was able to withdraw my cash at that time.

However, until last month (about 4 years after the freeze) that PayPal account was still restricted.  That is, I was unable to add or withdraw any new funds or make any transactions with that account.  Before those restrictions were lifted, I had to provide a verbal promise that I would not use the account to trade virtual currencies.  So PayPal's baby steps towards Bitcoin haven't reached the ToS department yet, apparently.