Not sure if you guys can post in the exchange section..but I just opened a brand new exchange that accepts paypal
http://minibits.weebly.com/will transfer to a .com if I get a good amount of orders
Sounds like a bad idea to use paypal if they have a policy of not allowing bitcoin trades and exchanges over their network. It's a competition game, and a dirty one at that, and paypal always wins. They have the lawyers and the conditions of use tweaked so whatever you do they can best you. Freeze account, take your money, report you... I would rather stay away from them.