IE scrambles script in IIS7 with static compression turned on

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I am having issues with javascript files not decompressing in IIS7 and stylesheets not loading properly.I can fix this issue by turning off Static compression in IIS but this can't be a permanent solution. The issue has suddenly started happening. We haven't changed the code.The web application is an asp.net web forms app in .net 4.static and dynamic compression was set in IIS.another web forms web application is still running fine with static compression set at the application level.the server was updated to .net 4.5 framework.Some of the stylesheets tags are set to runat server as I append a version number to force a reload of the css when its cached and a new version is released.This issue only happens in Internet Explorer.I am really stuck on this issue.The Request\[code\]Request GET /webapp/JavaScript/jQuery/js/jquery-1.3.2.min.js HTTP/1.1Accept text/html, application/xhtml+xml, */*Accept-Language x-en-GB-zscotUser-Agent Mozilla/5.0 (compatible; MSIE 9.0; Windows NT 6.1; Win64; x64; Trident/5.0)UA-CPU AMD64Accept-Encoding gzip, deflateHost localhostConnection Keep-Alive\[/code\]Response Headers\[code\]Key ValueResponse HTTP/1.1 200 OKCache-Control privateContent-Type application/x-javascriptContent-Encoding gzip,gzipLast-Modified Wed, 10 Oct 2012 15:45:44 GMTAccept-Ranges bytesETag "04f24efea6cd1:0"Vary Accept-EncodingServer Microsoft-IIS/7.5X-Compressed-By HttpCompressDate Tue, 04 Dec 2012 11:07:13 GMTContent-Length 19788\[/code\]Part of the Response Body\[code\]?@?????kw