Hi Matt,
Books On Board accepts PayPal and sell ePub's which use Adobe encryption. These can be "side loaded" to the Nook.
Many small publisher's accept PayPal through their own websites. If you like SciFi/Fantasy Webscription accepts PayPal and has books that are DRM free (as well as lots of great free books in their Free Library). Fictionwise also accepts PayPal IIRC.
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