I’m very confused now, I’ve just activated Google Checkout again to do some tests.
I can get to the Google Checkout page, but I get an error message saying that the shop does not ship to this region. I looked into the google checkout logs and the request and response seem to be OK, perhaps this error is not what it seems and something else is going on??
I had more trivial issue, we had multistore setup with store code in URL enabled which cause issue with google checkout and paypal. So, if you have System→Configuration→Web→Url Otions->“Add Store Code to Urls” set to “yes”, then URL must be adjusted accordingly.