I've been messing around with this off and on, and finally got it working! Here's what I found out.
In addition to the gzip in cherry.py, IIS was also compressing. Which is interesting, since the proxy was not compatible with it's own compression. I turned that off, and could hit the Calibre web interface.
Actually getting the IIS proxy to work correctly was tricky. I used this tutorial:
http://learn.iis.net/page.aspx/659/r...quest-routing/ I additionally had to add the following selections under 'filterByTags' in web config: A, Area, Base, Form, Frame, Head, IFrame, Img, Input, Link, Script. The tutorial only filters based on A href tags.
So, if you're using IIS7 this is a great way to open up your calibre library to your kindle.