It might well happen, that a transaction is marked as "UNVERIFIED". This does not come from mylansite, this comes from PayPal. PayPal may flag a transaction as UNVERIFIED if it is not completed yet. For example if somebody uses the bank account as direct source, it can take a few days for the cash to clear. Therefore this. I catch this exception and do _not_ mark the user as paid.
You will have to go and check your PayPal account to see when the money has cleared and after that, set the user to "paid".

But I would not know why you get the "5: Recipient email address incorrect". I might send you a debug file which you have to load and wait for a few transactions so I get some more logs. I'll get back to you on this one.