You have $200k sitting in your paypal account? Don't you have a bank account? What country are you in? What exactly did they say to you? How you mean you 'don't know how' you made $200k - you didn't expect to sell so much, or you sold $200k in one go with no idea who gave it to you? This seriously needs more information.
It's always a shame stories like this get so much attention. Lots of 'PayPal is evil' comments. A completely one sided 'I'm so innocent I didn't understand' perspective. All companies have issues once in awhile. I get that people are especially sensitive with PayPal because they deal with money and are huge. But come on. If you at all expect to be making more than even a few hundred dollars a month there's an onus on the 'victim' to read up on what they're doing and set things up in an appropriate manner. This situation sucks but it'd be nice if there was a balanced view on it and more helpful dialogue than 'Never use them! Go to court!'