CNC'ing a hydraulic copy lathe

I have been following this list for quite a while now and I think I have
come up with a project that I haven't seen on here yet. Maybe I will be
proven wrong!
I have a hydraulic copy lathe (for wood) that I am looking at semi CNC'ing
and I don't think it should be that hard. The carriage and knife control
are run by hydraulics which I don't necessarily want to change. I would
like to put linear encoders on both of these to, obviously, dictate
location so there would be two encoder inputs required for that. The tricky
part comes in to controlling the arm which drives the knife. It is not a
proportional movement which corresponds to the position of the knife only
the speed of the knife. Think of the switch as having three positions:
forward, stop, and back, in between there is the speed at which it goes in
those directions.
I said semi CNC'ing because I don't want to change the way the carriage
moves or the speed I simply want to drive the knife to the position it
should be relative to the position of the carriage. My thoughts so far have
been either a small linear actuator or lead screw to drive the arm which
positions the knife which should not be too much of a problem. The problem
I am having is in lack of knowledge in the control of it. How would I go
about controlling the position of this "non-proportional" arm to control
the knife. It should be a simple error feedback from the two linear
encoders, I think. Any thoughts would be greatly appreciated.

Kerry
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