I have to be a little careful as to how I answer this, as PayPal has begun removing my responses (even one that was accepted as a solution), but here goes:
You're not going to get much action out of customer service and you're not going to have any luck suing for $400. You should start by filing a complaint with the Better Business Bureau, which will get a far more robust response than customer service will ever give you. I would follow that up with another complaint at the Consumer Financial Protection Bureau - use the category "Money transfer, virtual currency, or money service > Mobile or digital wallet."
As to the money there, it all depends on how much you trust them to actually return it after 180 days. You can engage the services of an arbitration outfit like FairShake - I'm not sure it would be worth it, but it's up to you.
