Taf,
The Touch-DRO system is a lot more than a basic chinese system. Yuriys software is very good and in fact I use it on two of my machines. I built my MSP430 based units around 8-10 years or so ago. At that time he only provided wiring schematics, hints, Touch-DRO software for Android tablet and firmware for the TI MSP430 processor.
I already had an old tablet I could use. The electronics box including the MSP430 only cost me around £20 all told.
His software and firmware can work with various different types of scales. I elected to use magnetic scales from Machine-DRO. They were a lot smaller than glass scales and their read-heads. One big advantage of the magnetic scales is they can be cut to size and can even be stuck to the mill table or whatever machine you are using them on.
The later read-heads are a lot smaller than the ones I used. I was able to fit 3 axis readout to my Cowells Mill and 2 axis to my Cowells lathe, both are small machines.
Having seen your excellent work modifying your mill I’m sure you could do a small amount of electronic assembly and soldering. When I built mine I had not done any electronic stuff for around 50 years (Pre-teens).
The magnetic scales can be obtained with various resolutions, 1 micron, 5 micron and 10 micron with cost being highest for the 1 micron. I appreciate the magnetic scales are more expensive than other options but they do fit very neatly, and you cannot break a magnetic scale unlike a glass one.
You could start of with a single scale on the X axis and add the others as and when.
Colin