[seanwitte]

Digi-key has some mechanical shaft encoders that are only a few bucks each. Has anyone used one of these?

They're in the bottom right-hand section of the catalog page. There is one that has a 4 bit gray code output. Does it function like 4 switch inputs to the controller? I'm assuming its a passive device.

If thats how it works, then you should be able to grab the nibble on each loop and use it to figure out how far it went during the cycle. As long as your wheel doesn't turn more than 16 times between samplings it would be fine.

They don't have the hex output version, only the 4-bit gray code. Its defined in the data sheets so you can convert the gray to hex in code.