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That's unfortunate. I didn't really have as serious as any issue as you.
My initial order was cancelled, and after a few days I saw that my PayPal status was still "Pending". So I just wrote to PayPal customer service (I didn't raise a dispute; was hoping it would be resolved in a simpler fashion) and told them that transaction number so and so made on this date was cancelled by B&N, but my status is still "Pending" so could you clarify. A few days later I got an email from PayPal customer service that they had cancelled the transaction in question. I just received my latest updated credit card statement, and the cancelled charge is indeed not there.
I don't know if that will work for you, since your situation seems more complicated, but it worked for me.
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