Sadly, I've had somehing like this happen to me. eBay & PayPal only continue to be as strong as they are because buyers have no idea how badly they treat sellers and the buyers keep trusting in them :(
The complete step-by-step guide to get back to selling today!
There was an item on Radio 4s money box programme today on exactly this - Paypal did not come out smelling of roses - rather the stuff you put on rose plants