Yesterday, when trying to create a Paypal label from eBay, I ended up on the initial label page with a big yellow error box at the top telling me I needed to input my eBay seller ID into my account details on Paypal in order to use the label service. This has never, ever occurred before in all the years I've used Paypal labelling.
I simply went back into my Paypal summary and accessed the label feature from the sales transaction shown there, without further incident.
I don't know what these issues signify, but I'm disappointed to hear that Paypal CS was completely unhelpful in 'maggie's' case. I don't even want to imagine the scenario of Paypal's security being seriously breached.
P.S. It was a good idea to change your password in any case.