I had this, and have now managed to resolve it. I've suggested to PayPal that they need to create an FAQ for it. I had to go into my payment card in the "Wallet" and select "Update Card". I know everything looks OK and the correct (new) billing address is displayed. But, until you reenter your Security code and click "Update Card" it doesn't appear to update throughout the PayPal systems correctly. Once you've done this your new address should be shown as the billing address and hey presto you can now go to Manage Addresses and remove your old address....... Hope this helps.....
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