This is my first time doing anything with Zen Cart so I can't really give specifics, but when you put your mouse cursor over the paypal link, at the bottom of your IE/Firefox/Opera/Safari browser window, does it display a link that looks like this: http://www.yourstore.com/ipn_main_handler.php?type=ec? If not, then you have some configuration issue in your paypal module and I would consider deleting it and reinstalling it. If you do see a similar link when you hover over the paypal button I would say you (or another code savy person) might want to spend some time looking at the ipn_main_handler.php file located in your website under includes/modules/payment/paypal.

Wish I could help more...but I'm not a jedi - I mean Zen Master - yet ;)

Steve