After trying multiple system restores, hoster reinstalls, hoster downgrades which all failed to fix anything I found out how to correct the problem. I went to the temp directory under my user account (larryw) and deleted all files and folders. Once I did that the zip files work in Hoster correctly again. The path to the directory is
C:\Documents and Settings\larryw\Local Settings\Temp
Not sure what was going on but this fixed it for me!
