Paypal IPN results not being saved

I've enabled instant payment notification in Paypal. It appears that Paypal is sending the notification, but it isn't being saved at my end. Here's the Paypal debug results from a transaction that I made:

PayPal IPN Results
==================
address_city = Portage
address_country = United States
address_name = Sheldon Rampton
address_state = WI
address_status = confirmed
address_street = 713 W. Carroll St.
address_zip = 53901
business = sheldon2000@tds.net
custom = first_name = Sheldon
item_name = Friends In Deed
item_number = 1
last_name = Rampton
mc_currency = USD
mc_fee = 1.08
mc_gross = 27.00
notify_version = 1.6
payer_email = sheldon@prwatch.org
payer_id = 6WH8W4GZJHECY
payer_status = unverified
payment_date = 19:43:04 Feb 13, 2005 PST
payment_fee = 1.08
payment_gross = 27.00
payment_status = Completed
payment_type = instant
quantity = 1
receipt_id = 2635-1172-3116-5037
receiver_email = sheldon@sheldonrampton.com
receiver_id = T7AVFL6NBBZDY
tax = 0.00
txn_id = 7E792480YS394352P
txn_type = web_accept
verify_sign = AM78ceOjanDCcZRQc5FDhsRGBD0dAfjj9AY26ueYmg-fUgZRud-KpTOx

In looking through the code in paypal.module, I came across the following passage in function paypal_ipn that may be the problem:

    if (strstr($key, 'item_number')) {

      if (strstr($value, 'txnid_')) {
        $txnid = substr($value, strlen('txnid_'));
        $has_txn_key = true;
        $debug .= t("A Transaction ID exists and is #%key\n", array('%key' => $txnid));
      }

      $i[substr($key, strlen('item_number'))] = $txnid;
    }

I don't know exactly what this code is doing, but it appears to be the only code that sets a transaction key, and since key item_number doesn't have a value that begins with 'txnid_', $txnid is probably not being set. This in turn would mean that the following test fails when it occurs further down in the function:

elseif ($ppid && $has_txn_key) ...

I'm a complete newbie to the ecommerce module, so maybe I just don't understand something. If so, I'd appreciate it if someone could email me an explanation of what I need to do to get this working. My email address is: sheldon@sheldonrampton.com.