I'd just wait. If you don't need the money right away, you can earn quite a bit by waiting for a better exchange rate. PayPal sucks at this, yeah!
Whilst your earnings are getting a right kicking at the moment, lets not lose sight of the fact that your spendings are also at an all time low. Any link purchases or design work or any service you buy here on DP are bought in $$ and so are at the moment relatively 'cheap!'
I am not sure what to do in long term now when the dollar is expecting to keep losing value....I blogged a bit about it the other day. Keeping money at google in hope for better days is risky if you get banned
Since the dollar is expected to go down a bit longer, I don't think keeping money in dollars is the wisest option right now. I convert my dollars in paypal to euro's each time the account goes over $100,- and with google adsense I just get it payed out as soon as possible. When the US economy starts relying less on lending money off other countries - that's when I'll start keeping money in dollars. Anyhow: these are the side effects of a world wide economy - we just have to adapt and adjust. Not much we can do.