In this paper, we present a data gathering technique for sensor networks that exploits correlation between sensor data at different locations in the network. Contrary to distributed source coding, our method does not rely on knowledge of the source correlation model in each node although this knowledge is required at the decoder node. Similar to network coding, our proposed method (which we call Quantized Network Coding) propagates mixtures of packets through the network. The main conceptual difference between our technique and other existing methods is that Quantized Network Coding operates on the field of real numbers and not on a finite field. By exploiting principles borrowed from compressed sensing, we show that the proposed technique can achieve a good approximation of the network data at the sink node with only a few packets received and that this approximation gets progressively better as the number of received packets increases. We explain in the paper the theoretical foundation for the algorithm based on an analysis of the restricted isometry property of the corresponding measurement matrices. Extensive simulations comparing the proposed Quantized Network Coding to classic network coding and packet forwarding scenarios demonstrate its delay/distortion advantage.