Same thing with us.
Fortunately somewhat less impact as I am also from Hyderabad.
While creating account, instead of choosing AP, they are choosing APO/FPO. eBay needs to remove APO/FPO from list options, as we do not have APO/FPO option in India as per my knowledge.
In any case, many sellers are loosing due to this and high time eBay takes immediate action on this.