I have now solved this issue, so for anyone elses benefit the problem was due to this issue reported in the link below.

http://code.google.com/p/mod-zip/issues/detail?id=5

Basically if you use a browser (Chrome/Firefox etc) it sets the "Accept-Encoding: gzip,deflate,sdch" HTTP header which nginx forwards when proxying to the upstream Apache server that is generating the zip file list in PHP. This causes Apache to return the zip file list gzip encoded so mod_zip can't read it.

When testing with curl or wget it works without issue as these command line tools don't set a "Accept-Encoding" HTTP header.

To fix this problem I added to the nginx config file the proxy_set_header option as seen below.


location ~ \.php$ {
proxy_pass http://74.112.172.198:82;
proxy_redirect off;
proxy_set_header Accept-Encoding identity;
}