I had the same problem. Exchanges are very wary of PayPal for the reason that it does *nothing* to protect sellers. You should look into http://bitcoin-otc.com/ , #bitcoin-otc on freenode. It is a p2p marketplace where you can probably find someone willing to sell to you. Careful though, usually the prices for PPUSD are quite high, exactly because of the risks involved.

If you still can't find anybody, PM me in a week and we'll figure something out.