"Panic Mode" offered the CUI encoder and it's carried by Digi-Key -- if you can afford the $40 to $60 they want for it. Sounds like this is a simple project. If you don't need to know the direction of shaft turning, a simple "propeller" that slides through the slot of an optical interrupter (or a scratch-made version of one) would work for a simple project, two pulses per revolution. If you need directional information, you have to have a quadrature output from the encoder. You can make a simple "propeller" design by taking the back off a pot and soldering a shaft onto the back of the original shaft, maybe ripping out the "pot guts" first, and then adding the "propeller to the back. A simple "L" bracket over the pot bushing could hold the optical interrupter in proper position.
Oh, I forgot to mention (the reason for this edit) .... did you all realize that a stepper motor, the bigger the better, makes a not bad substitute for a quadrature encoder? Ground the center tap of one winding and use the other two leads as your quadrature output. Clip the output using diodes and send each through a comparator to square things up. Works great for nearly anything but REALLY SLOW shaft turns. If nothing else, it's a heck of a lot of fun to play with. I built a circuit that uses 74LS192 counters cascaded and a few extra gates and a flip-flop to cause the counter to run up or down depending on the direction of shaft turn. It was one of those "I wonder if a person could ...." kind of things that I'm always doing.
Dean