Have you tried Accu-Coder encoders? They are pretty cheap compared to foreign made ones like Kubler.
http://www.ctiautomation.net/Accu-Coder-Encoders.htm
We have had success with Panasonic PLCs & Toshiba PLCs. We mainly use them on VFD applications.
http://www.clrwtr.com/Panasonic-PLC.htm
http://www.ctiautomation.net/Toshiba-PLCs.htm
I believe IDEC manufactures a pretty good SmartRelay if you want to go that route.
TURCK & Balluff has some interesting inductive sensors that may fit your application.
http://www.clrwtr.com/Turck-Inductive-Capacitive-Proximity-Sensors.htm