I am having a very similar/same issue. This is my installation:

Zen Cart 1.3.7.1

Database Patch Level: 1.3.7.1

v1.3.7.1 [2007-09-18 10:31:48] (Fresh Installation)

I am using the PayPal IPN as my sole source of payment. I just made a test order - the PayPal part seemed to go fine - but - the order did not show up in Zen Cart anywhere that I can see, nor did it generate any emails, etc.

I am very new to Zen Cart and PayPal but have followed the instructions and everything seems okay. Again - the PayPal payment went through without issue.

Any ideas?