in reply to CPAN won't work with Busybox gzip

It's not really your CPAN installation but your incompatible gzip executable that you need to fix.

Looking through CPAN::Tarzip (which handles reading from a .gz file for CPAN), there is the following line:

$success = 0==system(qq{$command -qdt "$read"});

Maybe you can "fix" things by removing the "q" from that line. Alternatively, maybe you can simply decompress the .gz file manually and the need for gzip might be removed that way.