$xxx-$x,xxx.. don't refund it... you seem to have a good idea for it... make sure you add... "Not affiliated with paypal.com, paypal" inc.. I'd just put up a picture on the site of someone smiling... and in the caption write, "This is my friend, Payp Al"...then discuss things in your forum related to payp al. lol..
I dont think thats a good idea Why risk being jailed and all the hassle We all know how huge this company is and Im not the only who knows how aggressive google is when it comes to TM this name cannot be saved by explanation or misdirection I can only somewhat agree to your advise if the TM belongs to a small and not so popular company believe me, its not worth the risk
You cannot go to jail for this, but I would expect a stern letter from paypal or a significant lawsuit. Paypal didn't "forget" the .lc extension, it's just a waste of their time to buy up every single extension in existence. I can guarantee you will get a lawsuit or the domain taken away from you unless you drop it asap.