[mikets]

I still don't have enough details to tell you what could be wrong. The problem could be physical (defective encoder), wiring or coding.
One year, one of our electrical guys mis-wired the encoder. Although we have corrected it later, it turned out the encoders were fried. Had been scratching our heads for hours until I pulled out an oscilloscope to check the encoder output and found nothing. So the best bet is to first make sure the ecnoders are physically working. Then check the wiring correctness and finally check the code.