Geeeze. it sounds like this is a popular scam. I emailed Paypal and they confirmed that it was not their email because there has not been any "unsucessful log in attempts from a foriegn IP" on my account. I then copied and pasted the email, which was text and images rather than one big image, to the spoof address. The spell checker picked up a couple more spelling errors that I missed. Bastards!
I'm sorry about all of the others that have been harrassed or taken by this scam. Thanks for the info though.