I ported gchecky to the google app engine. you can try it here
It implements both level 1 (cart submission) and level 2 (notifications from google checkout).
Is there any other payment option that works on the google app engine (paypal for example) and supports level 2 (notifications)?
I think you can have a look into the official toolkit from PayPal's X Platform http://code.google.com/p/paypalx-gae-toolkit/
Paypal has a SOAP interface. You can certainly access that from within GAE--though you might run into timeout issues while waiting for the response.
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