Getting ready for the PayPal hurdle: MarketPress

I'm having trouble getting my Sandbox stuff setup to my marketplace ready for review by PayPal.

I created a sandbox developer's account and in it created three sandbox accounts. Owner, Seller, and Buyer. They all have their paypal assigned email addresses and I'm able to login to the sandbox properly with each one.

The owner's account has sandbox API credentials assigned to it and those have been input into the appropriate fields in the MarketPress main site settings. I also have the live API credentials setup there as well. The PayPal email address us is my primary one (this is a verified account).

On the testing subsite (http://teatester.teatra.de) store settings I have selected sandbox and entered the seller's sandbox email address.

When I attempt a test transaction, I get the following error:

There was a problem connecting to PayPal to setup your purchase. Please try again.
 520009 - Account [primary paypal email address] is restricted

In thinking about it, if it is being directed to the sandbox, then why does it even use the primary address since the transaction is not going to effect the primary account at all.

Did I miss a step somewhere? I think I have everything covered and double checked all my work, but I can't seem to figure it out.