if you are using Apache, hardly will mod_php pick up your php.ini. I guess you need to create/modify your .htaccess file in your webroot/WordPress root and add this line to it:
php_flag zlib.output_compression off
Then you need to verify with phpinfo() that the compression is really turned off (because the above may not work if you are using, say, mod_mpm_itk etc).
Alternatively you can try adding
somewhere in the top of your wp_config.php (hopefully safe mode is off).