I\'m getting the following error when using the IPN Simulator -
IPN was not sent, and the handshake was not verified. Please review your information.
This is incredible but in my case I needed to add a trailing slash to the end of the URL. Truly incredible.
I found out that IP-based http such as http://182.100.25.4/foo/bar/baz do not work. I used dyndns to create a DNS record to point to 182.100.25.4 and suddenly voila - http://somedns.ddns.net/foo/bar/baz started working properly in the IPN simulator. http-based URLs do work, you do not need to use https-based URLs.
Check web access logs on your server. In my case there were 500 Internal Server Error on my side and I got same message in IPN Simulator. But IPN Simulator were trying to send request any way...