Hi methodsavvy,
It is definitely possible to have a lightbox open on submit, although it would take a good amount of coding.
The real problem isn't the coding but PayPal. From what I understand PayPal cannot be opened in iframes: http://stackoverflow.com/questions/9464173/embed-paypal-in-an-iframe
I have another plugin for PayPal digital goods which is based on PayPal goods framework and it works by opening a popup window. Could a popup work for you?
Thanks,
Scott