I've set up an FTP account for myself and was able to reproduce the issue. The error is:
Security header is not valid
Which means the username, password, or security key is not correct. You can copy and paste them again from your paypal profile. Make sure to use the live credentials. There are some extra hoops you have to jump through to use paypal sandbox and you can always use the powerstore test mode even with paypal live credentials. Also there are no fees for doing a live transaction and refunding it on paypal.
Since you are using the latest version of powerstore you can just check the "Debug Mode" box in your admin in order to see the error message moving forward in order to see the error messages.
