+1 from me.  I have nothing but praise for all Dustin has done and what I've experienced with all my various dealings with him.

Take this offline if you must, let's get back to the issues at hand: can this be made to work, and officially, what is Paypal's issue with it?  I presently have some open cases with Paypal's large business engagement ghosts trying to find answers to these very things.  So far they have been useless, but I'm persisting.

Agreed, we can solve the Paypal transaction failings with some more hoops, but I'm still plagued by the feasibility of it based on the Paypal terms of service. 

It states you can't trade 'securities', and a security wikipedia says is a 'negotiable financial instrument representing financial value'.  The act of selling it for fiat currency instantly makes it a security I guess.

Evidently, it would be mandatory that no transaction mentions bitcoins in the description - and that unfortunately can only be by user discretion.  I'm sure some nefarious sad case number cruncher in the Paypal offices is proudly presenting their boss with their latest creation, the "all transactions mentioning bit* or BTC in the description" report. 

Besides that, it seems that chargeback claims draw attention and perhaps multiple small transactions over short time periods?  Two more things I can't see a way around.

As difficult as it will make my bitcoin life, I'm convinced enough from what I've read in this thread to dump Paypal forever.  I consider it too high a risk for me as a seller, regardless of any external safety mechanisms - Paypal hold all the cards, so I'm moving to a different table.  I suspect I'll have to change tables a few more times in the future too!

I'm in a similar situation where my entire 'banking' profile is online and Paypal represents about the only way I can 'cash out' to live in the real world given my location.  I'm by no means a fan of Paypal, I have nothing but contempt for them and their support structures and fees, but it serves a convenient purpose in my case.

I was lucky to not be defrauded (yet - PP has 60 days to get nasty), and kept most trades small as a safeguard.   Paypal commenced somewhat clandestine investigations on several of my transactions and cancelled them very quickly to 'protect me' before I released the coins, the rest where legitimate.  I was actually quite stunned at how much money people are willing to hand over with absolutely no safeguards, and just an anonymous me and a Confirm button standing between them.  The suggestions here can hopefully make the process safer for both parties with a clean recovery strategy in the case of either side failing.

Regardless, I greatly appreciate the efforts thus far and agree Paypal is most definitely not on the critical path for bitcoin success - Paypal just helps take it to a wider audience off the beaten track of the major established finance sectors, and helps me liberate my bitcoins too