Basically, don't use paypal if you can help it. Their customer service is worse than useless. Definitely issue a chargeback against them (Paypal). They will hate it and fight it and may lock up your account (take out all $ now if you have any in there) , but the CC company should stick up for you. IMHO Paypal is fine until you have a problem, then they suck ass.
-Ed Sawyer
*been there, been screwed by paypal, but the other way around, as a seller*