I had this problem too. My bank account was in use, active, OK, etc. In the Wallet area I clicked Set as Preferred for the bank account (since that was only thing I could think of in that page) but no impact. Then I noticed I didn't have a credit card listed, which I did have there before... BUT it is POSSIBLE the card in there was old/expired? So I added my current credit card, made NO other changes, tried shipnow again, and this time it worked, and used by bank account as payment method! A theory could be maybe when paypal cleaned up that old credit card, it messed with the account in general - who knows.
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