This will require some custom coding on your confirm page but you will need to do a check on your new session variable that you are setting. In an if statement around the checkout server behavior for PayPal you can check the value of this session variable. If it is not set to a PayPal value then do not execute the PayPal local checkout, if it is PayPal then proceed to the PayPal local checkout. This if statement will be a custom crafted piece that will not be directly supported. If you have any problems with it though let us know and we can try to help.
As for the rest of this what do you want to have happen when the user continues with the checkout? This part should get you past the checkout and insert the value into the db.
