Check this: Paypal IPN settings you would have to go here on your PayPal account: My account tab > Profile > My setting tools > Instant payment notifications (Middle of the list) > Update. Make sure it is enabled and it is pointing to your sites url.
If it is already set up correctly, then check out, your server's access logs and see if it is actually trying to access your site, should look something like this, 173.0.81.1 - - [28/Aug/2012:21:29:57 +0100] "POST /payment_gateway.php HTTP/1.0" 200 - "-" "-", and then check your sites error log and see if you see something like this, [Tue Aug 28 21:29:57 2012] [error] [client 173.0.81.1] client denied by server configuration:
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