***To resolve your limitation effectively, please provide all the following
steps in one time by logging in resolution center.***

1. As we found that there may be some risk when you logged in your PayPal
account, for your security, please re-change your password and security
questions.
*** Please do not use proxy or log into your account by using a public
computer.

How to change password and security question:

1)Log in to your account at https://www.paypal.com/.
2)Click the “Profile” subtab.
3)Click the “Password” link in the “Account Information” column.
4)Select either “Password” or “Security Question.”
5)Click “Edit.” You may be asked to confirm ownership of the account by
answering questions based on your account information.
6)Enter your current password in the “Current Password” box.
I. Password: Enter and re-enter your new password.
II. Security Questions: Select two new security questions and enter the
answers
7)Click “Save.”

Please note:
For your own protection we recommend that you create a new password. This
password should not be used on other sites. We recommend that your password
is not a word you can find in the dictionary, includes both capital and
lower case letters, and contains at least one special character (1-9, !, *,
_, etc.).
To provide the most secure service as possible, you may be asked to
complete a Security Challenge. Simply type the characters you see into the
blank field, without spaces.

2.Proof of Address. Please provide a copy of a current utility bill. The
bill must show your name and address exactly as they appear in your PayPal
account. In place of a utility bill, we will accept a copy of a cell phone
bill, bank statement, credit card statement, tax document or any other
official documents that helps us verify your residency at the address
listed on your PayPal account.

3.Photo ID. Fax or upload a copy of your photo ID (I.E National ID/Driver’s
License/Passport). Please make the copy of this as large and as clear as
possible.

We review the received documents in order and generally it takes 3 to 5
business days to process these documents. Once we process your documents,
we will contact you by email about the status of your PayPal Account.

Sincerely,
Risa
PayPal Account Review Department
PayPal, an eBay Company

You may provide us with the documents required by upload or fax function.
Please visit the Resolution Center and select a method to submit your
documentation.

- To upload your documentation, please click ‘Browse.’ , select the file
you want to attach, Click ‘Open.’
- If you are faxing documents, you are recommended to use the cover page
provided by PayPal. The cover page contains information specific to you and
using it ensures that your documents are routed and handled in a timely
manner. If you no longer have a copy of the fax cover sheet, please fax the
requested documentation to 86-21-28939832(China mainland); 852-3550-8589
(Hong Kong); 65-6510-4589 (Other countries). Attn: Account Review
Department. Please notate your email address and the case number beginning
with PP on each fax sheet when faxing the documentation.

After reading this, I find it’s a hassle to resolve something which one have been doing for the past few months. After looking though help sites from paypal, there are many cases unresolved. The money value in paypal is not little. As far as TechieDan is able to do, he will send in the documents first thing when he reaches home.

Will update more on this issue regarding Paypal.

Update: This was how I resolved this problem
Restore Your Paypal Account Limit