You are not alone. Sometimes 7zip simply does not work.
I am sure from my own experience that 7zip normal zip compression and save as zip without compression work for jars up to GRE 1.9.2.
I read that Mozilla spend some work altering the zip format for Firefox 4.
It makes that the info about the way it is zipped is at the start of the archive.
If I remember rightly WinRar can handle these (7zip fails).