Changed zlib >= 0.4 to zlib >= 0.3. 0.3 works fine for me, and 0.4 is not on hackage yet.

cabal-install/cabal-install.cabal

@@ -37,6 +37,6 @@ Executable cabal
         Hackage.Utils
 
     build-depends: mtl, network, regex-compat, unix, Cabal>=1.3,
-                   zlib >= 0.4, HTTP >= 3000.0 && < 3000.1, filepath >= 1.0
+                   zlib >= 0.3, HTTP >= 3000.0 && < 3000.1, filepath >= 1.0
 
     build-depends: base >= 2.1, process, directory, pretty, bytestring >= 0.9