Hi Involute Curve,
I have not seen one of these devices. I see no reason why they should not be used for this purpose. am I correct in assuming that there are 5 encoders in the arm assembly ? The software most do some pretty clever trigonometry. to convert these angles and arm lengths into X, Y, Z coordinates. ( I assume the arm lengths are fixed.)
The interface I have designed to be used with "Yuriy's Android tablet DRO" has 4 inputs and with some changes to the software should be able to output the data in a suitable format. It should also be possible to add support for a fitht channel by using a processor fraom the same family but with more I/O pins.
You can sometimes find encoders on the end of motors in printers etc. The problem is that some have strange numbers of lines. When I first started to fit a DRO to my milling machine I found an encoder from an HP printer that on my first test looked like it was 500 counts per rev. After fitting it I found the reading were not correct. It turned out it was 504 counts per rev.
Les.