There are 3 API calls associated with PayPal Express Checkout:
The second call is not required, but is used by PS3 to populate the confirmation page.
In my case (and likely yours too), the first API call, SetExpressCheckout, is done correctly by PS3. This is evidenced by the fact that I was correctly directed to my PayPal payment area.
It is at least the second API call, to GetExpressCheckoutDetails that is being misdirected by PS3 (likely to the PayPal sandbox URL: https://api-3t.sandbox.paypal.com/2.0/ ) and according to your interaction with PayPal, the third API call is also being misdirected.
The fact that I am able get the PS3 PayPal Express Checkout integration to work by commenting out the PayPal sandbox URL and replacing it with the "live" PayPal URL: 2.0/ indicates the source of the issue.