Any luck?
I looked into it once again and problem can be caused by caching plugins like WP Super cache.
Here is one thread I found on this topic. Quote from the thread
This can happen when an HTTP request’s headers claim that the content is gzip encoded, but it isn’t. This happened to me just now on WordPress where I had WP Super Cache’s gzip compression enabled. Normally it worked fine, but when I dumped some content out before the page was properly generated, it screwed up the compression.
Resolution if you’re the web developer: turn off gzip encoding or make sure the content is in fact encoded.
so you have to try disabling gzip compression in you caching plugin to troubleshoot it. Clear plugin cache and check if it works now.
I think you have to make sure that gzip compression is enabled on your server to enable gzip compression plugins. Contact your hosting provider if required.