sb225,it is sad that you didn't get the fund yet.
By Googling a little bit (and logical thinking,)i get to know that PayPal perhaps doesn't transfer foreign money in that means. Instead it perhaps sends the money to some Indian Bank (CitiBank!) and they sends that to your account through NEFT and NEFT works within branches of banks of India, not outside the country.
May be PayPal did transfer the money in the line of NEFT. But, either because of wrong bank information (which may not be the case as you had transferred money earlier) or some unknown delay in NEFT process, you didn't get the fund. If the bank information is wrong, NEFT will return the fund to the source, but it is a time-consuming process.
I am not sure if above is the case with you at all, but i just wanted to share the information in case it gives you any help to penetrate into the matter.
Best of wishes.
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