Matt: if you want to learn the file format and propose a patch, I think it would be OK for gzip to duck-type the file object and only raise an error when a seek is explicitly requested.  After all, that's the way real file objects work.  A quick glance at the code, though, indicates this isn't a trivial refactoring.  I think it should be possible in theory since one can pipe a gzipped file into gunzip, and I don't think it buffers the whole file to unzip it...but I don't know for sure. Another issue is that if the patch substantially changes the memory/performance footprint it might get rejected on that basis.

If you (or anyone else) wants to work on a patch let me know and I'll reopen the issue.