It doesn't seem to matter to PayPal HOW YOU WANT TO PAY for a purchase-- they will invariable insist that it be linked to a SPECIFIC ACCOUNT!
It seems they have all kinds of algorithms to combat fraud, but none of them can be explained in the user agreement, so you end up with all these weird seemingly-arbitrary restrictions imposed on your activity. Pisses me off too. I wish they'd just say "You can only use credit card if you're away from home and buying a TV from a seller in Timbuktu, and you can only use your paypal balance if you're buying a camera from ebay and you've had two password failures in the last three days, and you can't use paypal at all if we don't like your political affiliation".
IMO, Paypal give people a major false sense of security. The experiences in this thread sort of support my feelings. Sorry this happened. The disappointment runs far deeper than just the monetary loss.
My experiences have been much better. I liquidated all of my LF gear on this forum to members of the forum. I accepted personal checks and sent the goods before the checks even arrived. Never an issue. Made me feel good to be dealing with fine folks.
Some of my best LF purchases have been from members of this forum. All of my disappointing purchases have been from Ebay.