Last year, we cut gear teeth into the top plate of our swerve modules and put a smaller gear on a 10-turn pot attached to the robot. I wouldn't suggest it, because it means you can't turn the module continuously around, but we also had the motors mounted on the modules.
I would actually try those absolute encoders that came in the kit. Glue the magnet onto the end of a shaft that turns with the module, then place the chip above it. If you're using CAN and the Jaguars, you can do position control directly (but you have to make a voltage divider circuit for the Jaguar, because the board runs off of 5v, but the Jaguar ADC is 3v), or you can do your own PID in the code. One idea I've played around with is using a
Soft Pot and the corresponding wiper as an absolute encoder that can sit right above the module.
Never heard of the gyro idea, sounds intriguing. How well does it work for you?