Problem with Data URIs and CSS File Merge

In iphone.css magento also uses data URI but without quotes, try to do the same

background: #fafafa url(data:image/svg+xml;base64, PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHZlcnNpb249IjEuMSIgeD0iMHB4IiB5PSIwcHgiIHdpZHRoPSI2cHgiIGhlaWdodD0iM3B4IiB2aWV3Qm94PSIwIDAgNiAzIiBlbmFibGUtYmFja2dyb3VuZD0ibmV3IDAgMCA2IDMiIHhtbDpzcGFjZT0icHJlc2VydmUiPjxwb2x5Z29uIHBvaW50cz0iNS45OTIsMCAyLjk5MiwzIC0wLjAwOCwwICIvPjwvc3ZnPg==) no-repeat;

In your case instead of

/url\\(\\s*(?!data:)([^\\)\\s]+)\\s*\\)?/

you should use

/url\\(\\s*(?![\"\']?data:)([^)]+)\\)/

Actually this regexp covers more cases

/url\\(\\s*(?![\"\']?data:)(?!\%)([^\\)\\s]+)\\s*\\)?/

Especially this optimized svg data with gradients: http://codepen.io/tigt/post/optimizing-svgs-in-data-uris

I'd the same issue (still present in Magento version 1.9.3.1) so I've created a module to solve this bug: https://github.com/just-better/magento1-css-merge-data-uri-fix