walker_199 - What ever happened with you regarding this flight? I am in the exact same situation with Lufthansa, paypal is giving me the same exact message. I've called Lufthansa 3 times, Paypal once and the bank once. The bank says that no one has tried to get the money out. Lufthansa says that they are completely paid and the tickets are issued, period, end of story. Paypal says that Lufthansa has not tried to take the money out of my account yet. The issue is that my bank account will only allow this transaction (over 3k) if there is an authorization on the account for transactions over 3k, and those authorizations are temporary (they only last from 9am to 5pm on the day that I call to create the authorization). So, I would have to call every single day to make this temporary authorization and hope that they charge me between those hours. I can't change the payment method with Lufthansa because... they say they've already been paid.
Anyway, did you ever get charged, and if so, do you remember when? Did you lose your seats or tickets? I'm really anxious about this whole mess.