Well, you seem to be right in that the template seems to be having it's own compression/caching schema - I tried it just now and it works fine. Have tested with gzip/cache enabled/disabled (in Joomla! Global Configuration) and all seems to be OK.
Thanks for the assistance - it's much appreciated! I will do some research on template compression issues as well as this seems to be something I need to be aware of. . .
The following user(s) said Thank You: nant, krileon