Magento - billing countries different from shipping countries

app\design\frontend\default\(my_skin_name)\template\checkout\onepage\shipping.phtml

Line 103, remove or comment out this line:

<php echo $this->getCountryHtmlSelect('shipping') ?>

and replace with:

<select name="shipping[country_id]" id="shipping:country_id" class="validate-select" title="Country" onchange="shipping.setSameAsBilling(false);">

<option value=""> </option>

<option value="US" selected="selected">United States</option>

</select>

Or your own set of countries you want to show. You have the valid 2 letter country abbreviation, Magento should take care of the rest on state/province selection automatically for you.

Magento - Paypal does not allow your country of residence to ship to the country you wish to

app/code/core/Mage/Paypal/Model/Api/Standard.php
Line 237

Set the address override to "0"

If you set it to 1, the address overrides the Paypal address (the billing address), so when when it compares the addresses, if they don't match exactly, you get this error.