I use UTF-8 characters in the button's item name but it is becomes corrupted on PayPal's checkout page (accented characters, Hebrew letters, etc).

You need to setup your PayPal account to use UTF-8 charset on its checkout page. Login to your seller PayPal account and go to your profile. If you have the older layout, you'll see "Language Encoding" under the Seller Preferences column. If you have the new layout, click My Selling Tools, then click on PayPal button language encoding near the bottom. Then click on the More Options button. Change the encoding to UTF-8 and save. Now there shouldn't be any gibberish when posting from Easy PayPal Buttons.