My satisfaction with paypal refunds has had a 100% correlation to the willingness of the person with your money to refund it. I have never been successful at getting money back from PayPal except through a willing refund.
Basically, you call your credit card company and they say, "Well, you charged a service (from paypal), not merchandise. And as far as we're concerned, you got the service you paid for (i.e., the money was transferred)." Then you contact PayPal and they say, "we are not responsible for items that didn't ship for whatever reason. Contact the seller or your CreditCard company."
Their guarantees and whatnot have always been worthless in my experience. However, I've heard of other people getting satisfaction from them, so may I just didn't pursue it hard enough. It's not like anybody anywhere really WANTS to refund money that's already in their pocket.