Well you can sell on any account type so yes they would put a permanent limitation on a personal or business account if you broke their user agreement or acceptable use policy.
If you have been told your Paypal account has been permanently limited then Paypal tends to hold any funds for 180 days. This is the same time frame that buyers have to open Paypal disputes.
If no disputes are opened in 180 days then normally you are allowed to withdraw the funds. That is as long as you are over 18, the account is in your legal name and registered in the country where you reside.