If file is really just a gzip file then try checking that it isn't corrupt 
gunzip -tv file.bgzip

[download]
Looking at http://samtools.sourceforge.net/SAM1.pdf (which I think is the reference for the file format used by bgzip) it looks like the payload data (BAM) in the bgzip file is not ascii text - that would explain why you are seeing non-ascii text when you run it through zless.

In reply to Re^5: (OT) help reading a bgzip file by pmqs
in thread (OT) help reading a bgzip file by Anonymous Monk

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