[Kevin Sevcik]

You can't interrupt on the digital inputs on the DS. If you're using a very coarse encoder (4-8 cycles per revolution) you might be able to manage it by simply sampling it every data packet from the DS... If it isn't turned too fast.

That said, if you're only interested in the angular position of the encoder is there any reason you can't use a plain old potentiometer to do this? There's stopless potentiometers if you need it to roll over, or multi-turn ones if you need a couple of turns. Expending all that effort to turn an encoder into just a potentiometer seems a little... excessive.