This works: when wrapped in function ob_gzhandler works, really think the bug is with ob_start and internal functions.

<?php
function compress_output($output)
{
    return ob_gzhandler($output);
}
ob_start("compress_output");  
phpinfo();
?>
  
This doesn't:

<?php
ob_start("ob_gzhandler");
phpinfo();
?>