Re: Major encoder trouble, need advice.

Sounds to me like a ground loop problem, and a significant one since it
would exceed the limits of the differential encoder. Trouble is, such
problems are a pain to diagnose, often because the real source of the
problem is nowhere near what you think or expect.

Try inspecting (or even replacing) the motor's power cables. With the
motor disconnected, measure the resistance of the windings with respect
to ground. All windings should have similar resistance to each other,
and they should all be isolated from ground (motor frame). Do rotate &
jerk the shaft while making your measurements, because you are looking
for a short between a winding and the frame, and that can be caused by
loose debris inside the motor.

If all else fails, try replacing the motor for a quick test. If the
encoder works with a different motor, then you will have found the
culprit... If not, then inspect the drive amplifier for leakage to
ground. Be paranoid and overly suspicious, you'll eventually find it.

Mind you, sometimes installing a hefty ground strap between the motor
frame and the amplifier will make the problem disappear. It's generally
not a good way of fixing a problem, though, because it will mask the
real fault without fixing it. But it may help as a diagnosis tool.

Good luck,

Bert.