Zip 3 and Unzip 6.0f:
http://www.mgreene.org/pub/ziptest.zipContains bzip compression and seems to support large files without much trouble.

3-07-09 9:52a 4,361,643 K 0 a--- bigtest.zip
Compiled with Open Watcom C 1.8 for eComstation (32-bit) on Mar 7 2009.
Zip special compilation options:
ASM_CRC
ASMV
USE_EF_UT_TIME (store Universal Time)
BZIP2_SUPPORT (bzip2 library version 1.0.5, 10-Dec-2007)
bzip2 code and library copyright (c) Julian R Seward
(See the bzip2 license for terms of use)
LARGE_FILE_SUPPORT (can read and write large files on file system)
ZIP64_SUPPORT (use Zip64 to store large files in archives)
[encryption, version 2.91 of 05 Jan 2007] (modified for Zip 3)
UnZip special compilation options:
ASM_CRC
COPYRIGHT_CLEAN (PKZIP 0.9x unreducing method not supported)
OS2_EAS
TIMESTAMP
UNIXBACKUP
USE_EF_UT_TIME
USE_UNSHRINK (PKZIP/Zip 1.x unshrinking method supported)
USE_DEFLATE64 (PKZIP 4.x Deflate64(tm) supported)
LARGE_FILE_SUPPORT (large files over 2 GiB supported)
ZIP64_SUPPORT (archives using Zip64 for large files supported)
USE_BZIP2 (PKZIP 4.6+, using bzip2 lib version 1.0.5, 10-Dec-2007)
VMS_TEXT_CONV
[decryption, version 2.11 of 05 Jan 2007]