More proof of kathymack's wisdom: had you paid as a gift, you would not be able to file a claim.
What happened to you is a particularly nasty problem, because it's almost impossible to prove what the contents are (or are NOT, as in this case). This is not as unusual as you might think: there was a discussion about this very issue at CurlyNikki. A number of people purchased items off of the CN board that turned out to contain something other than the advertised product. Worse yet, this can also happen in stores that accept returns, when unscrupulous customers buy an expensive product, empty the contents into another container, refill it with something much cheaper that looks similar and bring it back to the store for a refund. Many stores will place it back on the regular shelves, while others will discount it since it's been returned.
This definitely makes me think twice about buying a product that I've never used before off the board. If you weren't familiar with the DMDCC, and had a standard of comparison, you probably wouldn't have known that it was fake.
I'm crossing my fingers for a successful outcome for you, DTurner32. In my experience, Paypal has always provided excellent customer service, and I hope they do the same in this case.