Wow, from what you have described, she sounds very unprofessional. Is English a second language for her? Maybe she can come on here and share her side of the story.
I do believe English is her second language. As for her side, I don't think anything productive could come from that. My original intent for this thread was to seek advice as to how to handle this situation. I think this would just turn into a he said she said debate.
At this point, I am just waiting to hear how Paypal rules on the matter.