QUESTION AND ANSWER
Why Am I Getting "Your Paypal Account Is Not Set Up Properly" Message?
This error usually happens if your login email address is not verified with PayPal. If the email is verified, a possible workaround is setting up an alternate email address, verifying it, and logging in with it instead.
For more information on Verifying your PayPal account please see: https://www.paypal.com/cgi-bin/webscr?cmd=p/acc/seal-CA-unconfirmed-outside