The evil part of paypal is that they don't learn from their mistakes very quickly and they seem to not realize they are affecting peoples MONEY. Kinda silly but true. It's business as usual over there regardless of $1 or $100,000 they just tied up of your cash.
I went through the same scenario in 2003 with paypal with tens of thousands of dollars locked up pending a review... Thankfully we had a back up plan (credit card processing)
The plus side of paypal... when you and if you can process some serious loot through them you get treated like a rock star and you get access people and help you wouldn't otherwise get.