I have had problems with Blizzard/Paypal before, Blizzard really doesn't have a good system for their Paypal payments, I've spent hours looping between them and Paypal.
ATM, I believe that blizzard requires that you have a credit card on file with Paypal, even if you do have balance on your Paypal account.
Could this be the problem?
If not I still might be able to help if you could provide a few more details.