Thanks for your reply. All of my trials were done in the sandbox. I'm curious about your configuration. Can you provide some details? I suspect there's some crucial difference that I'm missing.
My setup: Windows 7 Pro, 32-bit, MySQL 5.5 server, PHP 5.3.10, Apache 2.2. For IPN tests I added dynamic dns so PayPal could find my web server. Opening port 443 in my firewall made no difference, nor did any SSL configuration of Apache (altho' I may have missed something with this). WordPress 3.3.1.
I was able to get the IPN listener from here working independently of WP.