Can't confirm my identity when changing password
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There are multiple problems which you created.
At a failed login you tried to change your password. This would seem like suspicious activity to PayPal. It would have been better to correct the failed login before attempting to do anything else.
Next, you attempted to create a second account which could create another problem for PayPal as there are specific rules for a second account.
At this point I don't thing there will be any option except to contact PayPal to resolve the multiple issues. You will also have to work with PayPal to provide documentation on your identity.
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You could click on the "contact" link at the bottom of the page and see what options are available.
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