Running VM 2.9.6 but had similar issues with 2.9.4
With payments defined.
Created new payment with VM Payment -Paypal
Filled in all fields
Saving payment -> no error but the page did load admin template file so you only have the internal content within the <div class="virtuemart-admin-area"> tag very strange so a page without Admin menus etc.
Running php 5.4.28, Joomla 3.3.0, MySql 5.5.36-cll
[attachment cleanup by admin]