I have looked through the various threads and, though I have seen posts on this error, none of them seem to have had exactly the same outcome.

Previous threads suggest that "10501 Invalid Configuration - This transaction cannot be processed due to an invalid merchant configuration." is a result of not setting up PayPal Payments Pro in my PayPal account. In my case, this seems to be set up fine and I have received payments in the past, as recently as last week. In fact, I received the payment in my PayPal account but the order did not show up in the PayPal IPN module. Therefore, I have a chunk of money and no order to define what it was for. (In this case, the customer had inquired in advance so I have an idea, but there is no trail with which to work.)

I found a trail that pointed me to the PayPal log files, and found two log files for this transaction, seemingly identical variables but different correlation numbers and about 3 minutes apart. A few things I found strange:

1) [HANDLINGAMT] => 22.10, which actually amounts to 13% of the price of the goods, exactly the tax rate. On the other hand, it shows [TAXAMT] => 0.00, so those two fields are reversed.

2) [SHIPPINGAMT] => 47.78. If I use the Shipping Estimator before checkout, it shows $41.28. Even after adding 13% tax into the total it only comes to $46.65, though I would think the tax should be in the tax line. I checked Configuration > Shipping/Packaging and "added percentage" fields are set to 0 (zero).

4) [SHIPTONAME], [SHIPTOSTATE], [SHIPTOSTREET], [SHIPTOZIP] were all completed in the log file, yet PayPal received no shipping address.

5) The Response Array shows the error and [ACK] shows Failure.

I do not believe anything changed on my PayPal account. In fact, if that was the case, I shouldn't have received the payment, but I did. It must be something to do with how ZC is handling the response. I checked the path for the ipn_handler, and the settings in PayPal and in ZC match the actual path of that file.

What I did do recently is I turned on the options for payment by Cheque/Money Order and Store Pickup as a shipping option. This addresses the needs of some local customers, though I have not seen the options show up in my test shopping carts. I'm not sure if this may be causing the problem.

I also installed a debug module that I found on the forum to identify another problem yesterday, but that one didn't catch this error.

I have now set all three PayPal modules (Standard, Pro and Express) to Debug mode to monitor any further transactions. I also found the thread about GoDaddy hosting not needing CURL anymore, so I have set that to False, though if this were the problem, previous payments would have failed.

Comparing this log file to that of a previous successful transaction, I note the successful one shows "DoExpressCheckoutPayment" whereas this failed log shows "DoDirectPayment". Not sure if this is relevant to the problem.

Sorry for the long post, but I wanted to outline as much as I could in the hopes that I do not miss a key symptom that could lead to a prompt diagnosis.

Thanks in advance,
Matthew