I treied your script. I don't know how it got it run like that. I had to fix the sed statement. You have:
sed -e 'y/ABCDEFGHIJKLMNOPQRSTUVWXYZ/AbcdeFghIjklmnopqRstuvwxyz/' -e "s/^/\'/" -e "s/$/\'/"
that first "- e" should not have a space between the - and the e. I didn't have zip, so I chaged it to "ls -l" for testing. At first I got the same errors as you. But then this worked:
eval ls -l $list_of_file