I wonder if it's an issue with the specific type of zip compression you are using when re-zipping it.
You could have a look at this article for a suggested way of creating xap with code:
http://social.msdn.microsoft.com/Forums/en-US/netfxbcl/thread/67d9ce4d-285c-42ee-b4e0-d5640ca4f6a6/