thats pretty crummy of paypal to deviate based on a personal payment option. You are still using their services and since it is mediated through a third party they tech should be held accountable in helping you. Personal payment or not it was still facilitated on their site.
I'm sure if there are any members here that are close to this guy they will help you out in confronting this guy. He purchased a ported oil pump from me a few months back. I didn't have any issues with the transaction but from that point forward I've heard nothing but problematic situations.
There still has a be a way to hold him responsible for the payment for goods. Definitely a crappy situation. It would be nice to have him post a reply on this thread to at least speak up regarding this mishap but the likeliness of that happening are slim to none most likely.