our team had that EXACT SAME PROBLEM
long, dreadfully sad, story short we concluded it was hardware issue with the sensor ciruit board because we had infinite resistance running across the circuit board that we tested with a multimeter. But now im not so sure anymore... Recently i was browsing the programming forums here and discovered a certified national instruments programmer was saying there may be a problem with the Encoder.vi
As far as i know it is still a hardware issue (because of the infinite resistance) but could very well be a combination of hardware and software.
in other words:
All a team needs is someone to believe in them. - JohnBoucher [more] 
Re: Encoder Problems
Hybrid Mode
