On your earlier suggestion: I did arrange to have the server rebooted, and the problem persisted.
However, If I insert
ICSharpCode.SharpZipLib.Zip.ZipConstants.DefaultCodePage = 850;
before any given error line, it corrects the problem.
However, without knowing the original coding or rather the context of the zipping code, this could be at best a bandage fix. (Eg should the code be hitting the default value or should it be detecting it some other way? or should the default value be something other than 1 and does it get changed somehow?)