Gzip Compression IIS7 with Proxy Not working

I have seen posts with GZIP compression not working on IIS7, but none seemed to help in my case.
I have a proxy server that sends the request to my website on IIS7.
I have the following in web.config to enable compression:

 <urlCompression doStaticCompression="true" doDynamicCompression="true" dynamicCompressionBeforeCache="true" />
    <httpCompression cacheControlHeader="max-age=86400" noCompressionForHttp10="false" noCompressionForProxies="false" sendCacheHeaders="true" />

Note the noCompressionForProxies="false"
I have also updated the httpCompression tag in C:\Windows\System32\inetsrv\config\applicationHost.config
On enabling Failed Request Tracing in IIS7, I see the following reason for failure:

DYNAMIC_COMPRESSION_NOT_SUCCESS Reason="NO_COMPRESSION_PROXY" 

The request in the log shows as:

Headers="Connection: keep-alive
Via: 1.1 www.<<website>>.com (Access Gateway 3.1.3-<<SpecificVersion>>-     )
Accept: */*
Accept-Encoding: gzip, deflate
Accept-Language: en-us
Cookie: ASP.NET_SessionId=efm3mrq3vdnh4k55fjthm245
Host: <<Server>>
User-Agent: Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648; InfoPath.1; .NET CLR 3.0.4506.2152; .NET CLR 3.5.30729)
Ua-Cpu: x86
UID: 
FirstName: 
LastName: 
Initial: 
contract: 
ForceChallengeQA: 
Mail: 
PreferredName: 
"

The server is Windows Standard Server SP2.
I am running out of ideas here. Is there something more I should try?