I once had my PayPal account "temporarily" suspended under similar circumstances. Usually, all you have to do is fax them/upload copies of documents verifying your identity and you should be set within a week, if you're persistent and diligent.
The first time I had an incident was because of a sale I ran, and PayPal limited the account I got it fixed in a week, just in time for a sale of another product. This time, I emailes PayPal telling them about the previous story and asking if there would be a problem. There was, and my account got limited for a second time.
What I did then was, instead of submitting documents, I uploaded a screenshot of my email correspondence with PayPal, and their response. One or two days later, my account was free.