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

ini_set('zlib.output_compression', 0);

somewhere in the top of your wp_config.php (hopefully safe mode is off).