Alright, so I made a lot of headway. Essentially, I stopped using the ob_gzhandler, and switched to zlib.output_compression to On. This allows the url writing to take place, huzzah!
This opens up a smaller but still obnoxious problem. I use a dhtml tooltips library that allows for fun little tooltips with html in them. A few of them have popup forms. The function call is something like:
<a href='blah' onmouseover="ttip(this,'tooltipcontents');">link</a>
tooltipcontents can contain plain text or html. In this particular case, it has a form, input tags, the whole thing. Because of this, the url writer adds a hidden PHPSESSID value into the form. No problem, right? Unfortunately, it comes in the form:
<input type="hidden" name="PHPSESSID" value="5e11b4c585801298281c49e2093080de" />
All those double quotes break the literal string in the ttip() call, and...well..blech. I've tried using the following in .htaccess
php_value url_rewriter.tags a=href,area=href,frame=src,input=src,form=action
and it properly adds it to the action value (default is form=fakeentry), but it also adds the hidden value. Any idea as to how to circumvent this?