Now that I have access to VS today, I can test your code. After creating a GZip file with .NET, via the following code:
using (GZipStream gz = new GZipStream(new FileInfo(file).Create(), CompressionMode.Compress))
{
byte[] bytes = File.ReadAllBytes(file);
gz.Write(bytes, 0, bytes.Length);
}
I then ran your code against it and it worked just fine. The question I have is are you accessing a file that isn't local? If so, this may be the source of your problem. Otherwise, you might want to create the zip file with .NET and see if that solves your problem.