You're worried about pissing off PayPal? Or are you worried about what they might do to Steve?

Credit cards are VERY sensitive to issues like this and almost ALWAYS help you out and give your money back. The second people start feeling unsure about ordering online, they will be set to lose a lot of money. Even back in 1997, CitiBank refunded me the complete cost of a computer when the company that I bought it from went under while my computer was in for repairs.