Let me elaborate, if your account is taken over and used, or your credit card is fraudulently associated with a PayPal account, then this is fraud (as per PayPal). However in this case, you were willingly using the account to pay someone and entered into the transaction willingly. Even though the outcome was not favourable to you, but PayPal doesn't have the information needed to mediate.
In fact to PayPal it doesn't have the necessary information to judge who is telling the truth: it is as easy to fabricate a GoDaddy letter or whatever documentations you provided, and there is no easy way to tell (yes, PayPal can call one by one to verify, but this isn't scalable and very expensive). That is one of the reasons why eBay doesn't offer buyer protection.
I doubt you will get better protection with other alternatives like credit cards or bank transfers.