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I recently started using a Paypal MasterCard (2% back type), and I have been unable to link this card to my ebay account to make purchases. I have to use the card through my paypal account to make purchases on ebay. I was, however, able to pay my ebay selling fees using this credit card, but am unable to pay for anything using this card on the ebay site. I contacted ebay and the CSR described an error message that he had never seen before. He was supposed to follow up last week and never did. I also called PP, and PP blamed ebay for this situation.

Not ebay, but I've had 3 instances this week where my Paypal card failed due to "insuficient funds". I have around $1500 in the account right now and one of the failures was on a $10 purchase. I called Paypal and they said they didn't see anything wrong with my account. They blamed it on the merchants. Maybe not related to your issue, but it seems like something strange is going on.