Jaycoke,
Iron should work fine on your LXDE install. The message you see is a warning, not an error. Simply put, iron is complaining that it can't find the version information it wants in libz.so.1. This should have no affect on iron's working, though. It doesn't here.
When you installed iron, were any messages generated by Synaptic?
Try reinstalling iron and zlib1. Is any output generated?