I got it working finally by changing line 106 and 107 of /var/www/mwt/xc/classes/XLite/Module/CDev/Paypal/Core/Login.php
from this:
[line 106] 'auth_provider' => 'PayPal',
[line 107] 'state' => \XLite\Core\Request::getInstance()->state,
to this:
[line 106] 'auth_provider' => 'PayPal'/*,
[line 107] 'state' => \XLite\Core\Request::getInstance()->state,*/
For me the resulting return url was greater than the allowed 127 characters.
If you have a short domain name you may be able to just update your return url to:
Code:
https://www.yoururl.com/cart.php?target=paypal_login&action=login&auth_provider=PayPal&state=XLite\Controller\Customer\Login
Hope this helps someone.