[vitd]

"with the assumption that either PayPal will underwrite the loss"

No. He called and spoke to both eBay (who said they would not) and to PayPal and they assured him they would underwrite it. Per his article:

"The very helpful gentleman I spoke to informed me that ever since the eBay/Paypal split recently, domains are actually covered by their buyer protection now!" (Emphasis in the original)

[notahacker]

They did not assure him they would underwrite the specific loss, they merely pointed out that domains were covered by a buyer protection policy which allowed Paypal to make a decision at their discretion.

Frankly, I can't recall ever seeing any complainant more deserving of being on the wrong side of Paypal's discretion than this one.