Okay, I know the question is old, but I was having this problem myself when trying to send money to someone, and hunting on the forum did not yield any answers for me. I got ahold of Paypal customer service by private messaging them via Facebook, and have since been able to fix my problem, so I'm letting anyone else who's had this problem know what worked for me!
I was told to change my password and security questions. Literally that is all it took for me. For whatever reason, despite having recently changed the password, changing these fixed the problem instantly.
