I am having a couple similar issues as well.
First, it throws an ioError when trying to project with the .prj file present in the zipfile. I'm currently just testing against tasks.arcgisonline's geometryserver.
Secondly, on a good amount of my shapefiles, I am getting an error "Script took longer than timeout limit of 15 seconds" and that is popping at loadShapefile() on the shpReader.hasMore() while loop. These shapefiles are very small (talking 5-300KB), so I don't see what it is hanging up on.
Maybe you might be able to answer those issues.