Just to clarify I see this on the board so much, it is not against paypals terms of service or rules to sell digital currency or "intangible items" they just have a gray area for protection with it.
They've said it explicitly once. Search for "Clearcoin". They guy had a successful business, managed to protect himself from most frauds, but still got shut down by Paypal. He was a verified user and all. The reason was because Paypal did not authorize bitcoin exchange.