And i would just like to note that Ebay were very helpful when i contacted them through the "chat with us" live chat thing.

If you do not repay any money to paypal they will ruin your credit rating...they will send in the debt collectors.

You may end up having to put the whole sorry mess into the hands of the Financial Ombudsmans Service who will 'encourage' Paypal to do the right thing with their very big and powerful stick.

Link to FOS... http://www.fos.org.au/centric/home_page/resolving_disputes/how_to_lodge_a_dispute.jsp