Problems with paying PayPal

I've been using PayPal as my default account for payment to iTunes for quite awhile now, but for some reason it has quit working. There are no problems with the PayPal account itself, and iTunes will allow me to use a credit card, but when I try to switch it back to PayPal, it rejects it all the way at the end of the process, after PayPal say's a new Payment Agreement has been created. Anyone else out there having this problem?

It looks like the failures was due to invalid city, state and zip code combination.
PayPal is kind of paranoid on the city/state/zip combination for the shipping address when it tries to finalize the transaction. Their rule is not flexible enough to tolerate spelling differences. They require no abbreviation in city names and using 2-character code for states. It appears some of your customers used HAWAII instead of HI for shipping address, and PayPal rejected that during transaction finalization.
In particular, here is an sample of correct city/state/zip combination:
PRINCEVILLE HI 96722
Please ask your customer to try "HI" instead of HAWAII during checkout and let me know if that works for them.
Thanks,
Eman Fu
Senior Computer Scientist
Adobe Systems Incorporated

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