What PayPal told you is true, they will not simply reverse the transaction - sounds like they forgot to mention the fact that they do have a process in place for "unclaimed" transactions. As the funds went to an email address that is registered with PayPal however, (apparently not active), you cannot cancel the transaction. The status should show "unclaimed" on your end. PayPal will return the funds to you (the sender) after 30 days. Should the money go to the wrong address and the receiver claims or accepts the money, it's up to you to negotiate the return. If that's not possible, you can try to open a dispute. Situations like that can be a bit tricky. If the address you sent the funds to was never registered with PayPal, then you would be able to cancel the transaction yourself but, in this case the address was registered with the system.
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