I agree there are likely places you could mount a more typical encoder or pot. If you really get stuck, though, we used a string pot last year. Check them out at
http://www.celesco.com/index.htm. The SP series is what we used. They are basically a multiturn pot inside a housing with a spring return and, of course, a string (steel cable). Quite slick, also fairly expensive ($150+) so exhaust other options first.