You can use Pygpgme to create a password-protected gpg file, which is compressed.
You'll need to use the equivalent of
gpg -c myFile
or
gpg --symmetric myFile
and
gpg myFile.gpg
I don't know what the equivalents are in that Python module, but I know they've existed since version 0.2. There was a bug report before then mentioning the lack of it, but someone released a patch and they fixed it in version 0.2.
This uses symmetric encryption so you don't have to worry about keys.
You might find my post asking how to use it on UbuntuForums. Feel free to answer it if you know.
