We originally split the encoder wires as I described before.
When we did this...
1. We found the chains from the gear boxes to the rear tires snagged and caused tuning issues, so we removed the chains.
2. We found one of the CIMs would always fault it's Jaguar...even unloaded and we replaced it (old CIMs....long hard life)
3. With the only drive wheels in the air we could tune the Jaguars with the cable split and it worked.
When we finished the actual robot instead of the kit of parts...
We had problems tuning one side with the split cables.
The side with issues, as it turned out, had the bad CIM back on it (this time it found a garbage can

).
Even without the bad CIM we still had issues with that side and occasionally with the other.
What we ended up doing to fix it:
We created an optoisolator board with Schmitt trigger TTL input and 74HC TTL output...actually we have several versions of this and I'm not sure we need all of the circuit for this. We wanted to make sure we considered all the possible twists so we went for overkill. This board requires 5V from the digital side car in it's current form and when I hand wired it, I put 7805 on it with a 4,700uF capacitor just to make comparisons with the sidecar's power.
Basically at this point, the encoder channels are each driving merely 1 TTL input, and that input is a Schmitt trigger with hysteresis. The Jaguars are each powering merely a single 74HC04 inverter and their channel inputs are the only thing connected to the inverter outputs.
It's entirely reasonable we could do without most if not all the TTL logic with careful selection of components.
As the final product gets power from the digital side car and doesn't actually reduce the cRIO's control, I think this *might* be legal. Guess we'll find out the hard way. If it's a problem, the PCB has the same headers at the cRIO digital I/O ports...so we could just connect to the cRIO and run the Jaguars like the Victor 884s via the CAN bus.
Regardless when I get a chance I'll put the schematics and documentation some place accessible.
The only thing I do wish we had was some motor capacitors, but even without them we made this work using mere 4 wire telephone wire to the encoders right next to the CIMs.