I thought you said it wasn't on your local server?
I also notice the pp_confirm.php page is not found on my localhost server. 
do you mean the return from paypal is trying to find the page using the local host address?
If that is the case, open the checkout page and go to the Server behaviors panel. In the list of server behaviors, double click the Authentication for paypal Express checkout server and double check that the Return URL pointing to the pp_confirm page is using the correct address for your site.


