How can I limit the value of my bank account tied to PayPal?
Short answer, you can't. Don't link your primary checking account to PayPal. Open a separate bank account like ING Direct and keep very little balance. I wrote about this a while back in my blog.
You can limit the value of your checking account tied to paypal by not putting money in that account.
In fact, you should always limit the balance in your checking account to what you plan to spend, plus a reasonable buffer. Anything you have above and being that should be in separate accounts (both to minimize exposure as well as maximize your interest earned).