I have seen a couple cases where people have had issues of it not showing up. And they said when they got to the checkout process they hit "don't have a PayPal account", even though they did. It then gave them the option to choose Bill Me Later or to use a credit card. I am not sure why , it maybe a glitch but that seemed to work.
The only other thing I can think of is maybe your two accounts (Paypal&Bill Me Later) are no longer linked together for some reason??
As far as your recent purchase, I would contact your seller if she has not already shipped and explain the situation. I believe you can ask her to cancel the transaction so she doesn't lose her FVF's and have the transaction canceled. Then if she obliges it can be relisted and you can BIN again and try to pay how I mentioned above. But honestly that is all going to be up to your seller.
Hope that helped a bit