Paypal are the fraudsters, have a look at
www.paypalsucks.com, closed my brothers account with £6k and a friends with £15k. Released after 180 days. It does say they can close you're account at any time in the t&c's whn you sign up. Think about it. They close 10 accounts per day with £10k in each, that's £100K per day they are earning interest on. It's no suprise they are owned by EBay, another company which doesn't keep many people happy!!
When I had this problem I called, don't listen to the rubbish standard answers from customer service, ask to speak to their supervisor, if they aren't helping keep asking for their supervisor until you get somewhere. Do not be frightened to be stern. I was getting told rubbish by customer service for 3 weeks, used this tact and account was opened within the hour :-)
Worth a try?