this is why I always just mark it as being for a good/service and use a credit card. If the seller is desperate to avoid the fees, I will add the 3% or whatever to my payment but a high volume seller should just be factoring that into their prices.
Marking it as a purchase gives you buyer protection and using a CC gives you another layer of protection. Paypal is providing a service after all...doesn't seem unreasonable that they should be paid for it.
Doesn't seem strange to me at all that you would have to jump through hoops to do this...since what you are doing is explicitly against the rules.
Isn't there some gray area with proxying in the context of an online community, though (which this is)?
In any case, for practical purposes, I agree it's probably easier to just mark as goods, and so add in the fees.