n Zend_Gdata_App_MediaFileSource::encode there's the following code:
$fileHandle = fopen($this->getFilename(), 'r', true);
$result = fread($fileHandle, filesize($this->getFilename()));
The problem is that if filename is a stream filename, fread() would not read the whole file. Instead, stream_get_contents() should be used to read the whole file.