PayPal Standard Gateway not working Membership 2 and other issue

With some good coding help from support I was able to work through my registration problem from this thread:

And with a lot of work I've seemingly found a work around for the Membership/Subscription model I've been trying to achieve since the major rewrite and release of Membership. I'm trying to set up ability for (Paid) Subscriptions after (Free) Default membership. After setting it up as suggested in the thread in the link above I found out that I had to also set up a "standard membership (with no fee)." Because, there is a major flaw in the functionality of recurring payments set up. Under the option of "After this membership ends" there is no option for reverting users back to the plugins available Default Membership. There is only a choice for "Restrict user back to Visitor level." Like, WHAT?! (image attached)
Because of this when a user either cancels or is deactivated for any reason they are unable to see and/or re-signup for the memberships/subscriptions. The plugin knows they are users but does not display available memberships. And thus why I finally had to create another Standard Membership labeled "default logged in", set it to free and have it be canceled when signing up for any of the other memberships/subscriptions. Which the option for this is: "Cancel (name of membership) on subscription - Keep or Cancel" WHAT?! THIS IS MIND NUMBINGLY CONFUSING!!
How about it says something like this:
Cancel (name of membership) when user subscribes to this membership? Yes or No?

I think I've got it set up right...? (image attached)

Ok, onto my BIG problem with PayPal. First, I've been getting notifications from PayPal about failing IPNs, such as this:
Please check your server that handles PayPal Instant Payment Notifications (IPN). IPNs sent to the following URL(s) are failing:

What is this all about?
I have set up the IPN correctly with the URL the Membership 2 plugin provides with the instructions from here:

Does this have anything to do with why the Standard Gateway is no longer working? It seems to be "stuck" in sandbox mode. When I've never had it in Sandbox mode. When trying to set up for recurring payments, it is not being redirected to PayPal payments page. It just signs a user up for the membership/subscription for free and does set up a pre approved payment for recurring payments.
It literally says Sandbox next to the signup button. I have the Standard Gateway set-up as I've always had with correct Merchant ID and IPN URL. (Images attached)