Membership paypal IPN problems

Hi,

I'm only using 2 gateways, Paypal express and Paypal Single Payment.
I am currently testing with Paypal Sandbox

I am also using the latest version of Wordpress.

When a user subscribes, all the info gets sent to Paypal perfectly. However, once the transaction is done, the user's membership profile isn't updated. Through the wordpress admin, I can see that there's no record of the transaction or anything.

Membership uses dynamic IPN with the use of notify_url in their HTML. That way Paypal can send their IPN to the location that's stated in the notify_url parameter.This serves as a confirmation for the membership plugin that the client did in fact pay and he should therefore become a member.

However the notify_url parameter that's sent is:

(mywebsite) wordpress%2Fpaymentreturn%2Fpaypalsolo&submit.x=36&submit.y=17

or in other words

http://(mywebsite)/wordpress/paymentreturn/paypalsolo

Which does not exist. In the wordpress folder there is no such thing as the paymentreturn folder.

So if I understand correctly, the IPN is failing because membership is telling Paypal to send back the IPN to a location that doesn't exist.

What's going on? And what is the notify_url parameter normally supposed to return?

I tried re-installing, but that didn't change anything.

I can manually change user membership levels, but I want it done automatically

I became a member (paid money) just to get this problem fixed.

Help would be GREATLY appreciated.

Thanks in advance