You'll still have the PayPal protection for what that's worth. I had a problem selling once and I can't remember the details, but I couldn't amend it through eBay (something like combined shipping I think) and just sent the buyer an invoice using PayPal, as eBay had recommended I do. I explained it to the buyer, and they were fine with it. However, it wasn't a high value item.
I also have accidentally used an old email address as the paypal address (the form was pre-filled with an ancient email address for some reason), I didn't check it, and so I had to re-add this email address to paypal before the payment would clear. If the seller accidentally hit a key in the wrong field it would screw up their email address, and leave them in the position you describe.
I would say it sounds fine, especially given the detective work you've done.