Well i just reaad the first line of your plan its completely wrong. You are limited to being sent $500 you will be SOL if he tries to send 650.... but shop4gaming.com would be your best bet..
edit: also who cares about you neighbore /wink haha you dont neeeed a proxy if your not using you own wifi the only way you could get in lega trouble is if paypal tries to investigate and tracks the ip down to your neighbors which i really doubt will happen.
Edit again: In my opinion they will probably only track you down after maybe 5 or 6 times so maybe every other time you do it try a proxy but usually proxys leave you unsucessful.