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The paypal account was acting up ... we are now using a different one and everything is working as expected so false alarm. Thanks for all the reply's and the thread can be closed.

Now i am confused do we even need a business account for this to work?

Well i cant imagine any of my .htaccess entry's causing paypal not being able to connect. I only have entry's to block crawlers/bots and for SEO. Edit: I have found my issue i think. We need a business account to use IPN that is used for the notifications right? I thought it was a business...

Does the the dbtech_donate_payment_callback.php file need to have certain chmod permissions? I will check my .htaccess if there is anything that may possibly block that.

Nope an actual donation 2 times 1$ with a different paypal account

Well i just installed this addon. Set everything up and tried to donate to myself. The donation went fine but it doesnt count up on earned nor do i see myself as a donator and nothing shows in the donation log but an error (No Results Matched Your Query).