All those looking to use PayPal with Second Life can do so by visiting this link....
http://www.slexchange.com/modules.php?name=Your_Account&file=fundsdeposit_usd
It's apparent the problem with PayPal/Second Life is the automated conversion process; taking your real world money and converting it into Linden. However, being in the technology field, I'm always looking for the work around. Visiting the link above will take you to a page where you can import US Dollars into the Second Life universe, via Slexchange. Once you have your US dollars, the conversion to Linden is simple.
1.Visit link above and add US dollars to your Slexchange account.
2.Convert your purchased dollars into Linden.
3.Find an Slexchange ATM in world.
4.Simply say withdraw and the amount and guess what? You have Linden!