Please consider this change since the old code didn't work.

subscription/models.py

@@ -3,19 +3,21 @@
 from django.conf import settings
 from django.db import models
 from django.contrib import auth
+import django.contrib.auth.models
 from django.utils.translation import ugettext as _, ungettext, ugettext_lazy
 
-from paypal.standard import ipn
+import paypal.standard.ipn.models as ipn_models
+import paypal.standard.ipn.signals as ipn_signals
 
 import signals, utils
 
 class Transaction(models.Model):
     timestamp = models.DateTimeField(auto_now_add=True, editable=False)
     subscription = models.ForeignKey('subscription.Subscription',
                                      null=True, blank=True, editable=False)
-    user = models.ForeignKey(auth.models.User,
+    user = models.ForeignKey(django.contrib.auth.models.User,
                              null=True, blank=True, editable=False)
-    ipn = models.ForeignKey(ipn.models.PayPalIPN,
+    ipn = models.ForeignKey(ipn_models.PayPalIPN,
                             null=True, blank=True, editable=False)
     event = models.CharField(max_length=100, editable=False)
     amount = models.DecimalField(max_digits=64, decimal_places=2,
@@ -164,12 +166,16 @@ def valid(self):
     def unsubscribe(self):
         """Unsubscribe user."""
         self.user.groups.remove(self.subscription.group)
+        self.active = False
         self.user.save()
+        self.save()
 
     def subscribe(self):
         """Subscribe user."""
         self.user.groups.add(self.subscription.group)
+        self.active = True
         self.user.save()
+        self.save()
 
     def fix(self):
         """Fix group membership if not valid()."""
@@ -239,7 +245,7 @@ def unsubscribe_expired():
     Loops through all UserSubscription objects with `expires' field
     earlier than datetime.date.today() and forces correct group
     membership."""
-    for us in UserSubscription.objects.get(expires__lt=datetime.date.today()):
+    for us in UserSubscription.objects.filter(expires__lt=datetime.date.today()):
         us.fix()
 
 #### Handle PayPal signals
@@ -265,7 +271,7 @@ def __init__(self, user, subscription):
             Transaction(user=u, subscription=s, ipn=payment,
                         event='new usersubscription', amount=payment.mc_gross
                         ).save()
-    else: us = PseudoUS(user=u,subscription=s) 
+    else: us = PseudoUS(user=u,subscription=s)
 
     return us
 
@@ -310,7 +316,7 @@ def handle_payment_was_successful(sender, **kwargs):
                     event='unexpected payment', amount=sender.mc_gross
                     ).save()
         signals.event.send(s, ipn=sender, subscription=s, user=u, event='unexpected_payment')
-ipn.signals.payment_was_successful.connect(handle_payment_was_successful)
+ipn_signals.payment_was_successful.connect(handle_payment_was_successful)
 
 def handle_payment_was_flagged(sender, **kwargs):
     us = _ipn_usersubscription(sender)
@@ -319,7 +325,7 @@ def handle_payment_was_flagged(sender, **kwargs):
                 event='payment flagged', amount=sender.mc_gross
                 ).save()
     signals.event.send(s, ipn=sender, subscription=s, user=u, event='flagged')
-ipn.signals.payment_was_flagged.connect(handle_payment_was_flagged)
+ipn_signals.payment_was_flagged.connect(handle_payment_was_flagged)
 
 def handle_subscription_signup(sender, **kwargs):
     us = _ipn_usersubscription(sender)
@@ -358,7 +364,7 @@ def handle_subscription_signup(sender, **kwargs):
                     ).save()
         signals.event.send(s, ipn=sender, subscription=s, user=u,
                            event='unexpected_subscription')
-ipn.signals.subscription_signup.connect(handle_subscription_signup)
+ipn_signals.subscription_signup.connect(handle_subscription_signup)
 
 def handle_subscription_cancel(sender, **kwargs):
     us = _ipn_usersubscription(sender)
@@ -371,6 +377,7 @@ def handle_subscription_cancel(sender, **kwargs):
                         event='remove subscription (cancelled)', amount=sender.mc_gross
                         ).save()
         else:
+            us.unsubscribe()
             us.cancelled = True
             us.save()
             Transaction(user=u, subscription=s, ipn=sender,
@@ -385,8 +392,8 @@ def handle_subscription_cancel(sender, **kwargs):
                     event='unexpected cancel', amount=sender.mc_gross
                     ).save()
         signals.event.send(s, ipn=sender, subscription=s, user=u, event='unexpected_cancel')
-ipn.signals.subscription_cancel.connect(handle_subscription_cancel)
-ipn.signals.subscription_eot.connect(handle_subscription_cancel)
+ipn_signals.subscription_cancel.connect(handle_subscription_cancel)
+ipn_signals.subscription_eot.connect(handle_subscription_cancel)
 
 def handle_subscription_modify(sender, **kwargs):
     us = _ipn_usersubscription(sender)
@@ -418,4 +425,4 @@ def handle_subscription_modify(sender, **kwargs):
                     ).save()
         signals.event.send(s, ipn=sender, subscription=s, user=u,
                            event='unexpected_subscription_modify')
-ipn.signals.subscription_modify.connect(handle_subscription_modify)
+ipn_signals.subscription_modify.connect(handle_subscription_modify)