Jacky, this needs to be discussed with Scott. It's all just too weird for words. I believe you can do it with PayPal, but you definitely need to talk about options with him direct. Scott rarely comes over to the boards, and he said he was investigating this situation when I sent him an email about this last week (and also said he had contacted you), but he said it definitely wasn't a problem with FaithWriters. Regardless of what the bank is saying, it would surely be happening to everyone if the problem was here.
So email Scott (you should have a reply email from him recently about this), and let him know the lastest development. No one on the boards has the ability to help you with this.
Really praying it all gets sorted out fast for you.