System has libz in two places
  in /usr/openwin/lib
    /usr/openwin/lib/libz.so.1

  in /usr/local/lib
    /usr/local/lib/libz.so -> libz.so.1.1.3
    /usr/local/lib/libz.so.1 -> libz.so.1.1.3
    /usr/local/lib/libz.so.1.1.3

The following configure options find the correct libz
------------------
./configure \
 --with-apxs=/usr/local/apache/bin/apxs \
 --with-config-file-path=/usr/local/apache/httpd/conf \
 --enable-track-vars \
 --enable-ftp \
 --enable-bcmath=yes \
 --disable-debug \
 --enable-memory-limit=yes \
 --with-zlib=/usr/local 

The following generates the error
  checking whether to include zlib support... yes
  checking for gzgets in -lz... no
  configure: error: Zlib module requires zlib >= 1.0.9.
----------------------
./configure \
 --with-apxs=/usr/local/apache/bin/apxs \
 --with-config-file-path=/usr/local/apache/httpd/conf \
 --enable-track-vars \
 --with-zlib=/usr/local \
 --with-mysql=/usr/local/mysql \
 --enable-ftp \
 --with-tiff-dir=/usr/local \
 --with-jpeg-dir=/usr/local \
 --with-xpm-dir=/usr/X11R6 \
 --with-gd=/usr/local \
 --with-gdbm=/usr/local \
 --enable-bcmath=yes \
 --disable-debug \
 --enable-memory-limit=yes \
 --enable-calendar \
 --enable-magic-quotes \
 --with-db2=/usr/local/BerkeleyDB277 \
 --with-xml

I tried to eliminate one at a time different options but
when I find one that by removing it will let the process
finish, and then put that option into the above "success"
configure above, the configure will work. I.e. it is not
just one option causing the conflict.

Current work around is to not use zlib for now.

UPDATE: Removing the libz from /usr/openwin/lib works