How to build a DRO?

Hi guys,

I was hoping to build a digital readout for my milling machine. The
Idea was to use a rotaty enoder with a stainless steel wire and an
rotary spring to convert linear motion into rotary motion for the
encoder, the pulses of which would be counted by a pic chip and
displays the measurement on a 2 x 16 line LCD.

Has anyone seen a project like this. Hope you can help.

Cheers Dave.