Again, bottom line, paypal (not worthy of capitalization) sux.
Our only option is a pricey merchant account. And in the end can end up losing you a lot of money. I've began to just accept checks and money orders. It takes longer for an item to sell, if it sells, but I offer a lower price than others on eBay with the same item. That is about the only advantage I have against the sellers that accept paypal. Some people are willing to save that extra buck and send a check. But others are impatient and dont want to take the time to mail a check.
Oh well, I'm about through with selling on ebay. It's getting to be too much of a hassle. It used to be fun tho!