In a stunning update to this story, paypal has surprised by by actually refuting a bitcoin chargeback and using
the blockchain + sent letter as evidence.
So the money was deposited back into my paypal even though it could be pulled back out, and they are disputing the bank.
I am very surprised. I do have a very good history with them and about a 7 year+ account.
Well, you seem got REALLY lucky and it's still hard to believe.
Our company is now moving live the new BitCoin/Paypal exchange with auto-tracking of both BitCoin an dPaypal payments (otcexchange.net). We've been digging for months and found no reliable way to fight against CC/ACH chargebacks on Paypal transactions. Having that said we've dediced to go for invite-only community on the marketplace...
If PayPal actually sided with payment recipient, that makes a HUGE difference, really. And a big hope..