Al,
Thanks for the reply. Hardware was our first thought as well. We checked the voltage output from them and they are send as much as 4.96V to the analog module (couldn't ever get exactly 5, but I expect we weren't hitting the exact roll-over point).
We are using these guys:
http://www.usdigital.com/products/en...tary/shaft/ma3
They are magnetic encoders with 10-bit resolution, so I don't think shorting around the end is the issue.