Absolutely, this is a scam that has happened over and over to the T! It has been highlighted on the news many times.
Very similar to one on Craigslist that involved a boat we were trying to buy. Looked nice and had a local listing, but when we inquired the lady said it was in Nevada and would need to be shipped, but BIL worked at the shipping company and said he could get a big discount on the delivery... Also said they were very busy with running their family business that they had just taken over! Also, no we couldn't see it, too busy to show it, and had so many calls about it...
HA! Ask yourself why they would go to the trouble of shipping a dog to someone when it would be very easy to rehome the dog right where it is without air shipment, etc. I wish I could post a link to a news story from a month ago that was exactly like this and the lady was out her $200 with no dog. I am not sure paypal will reimburse unless it is a company you buy from. Also, can't you buy a similar dog for that amount of money in your local area?
Go with your gut!