Carl,
I went the route you are taking a few years ago on my previous mill.
Even though these digiverns are a cheapy variety, they do need to be treated with respect when it comes to chopping them about. Your problem might be on reassembly, and you haven't got the correct pressure on the phos bronze wiper strip that runs along the edge of the main scale bit. They can be a bit fiddly to get back into the correct position and adjusted up.
Over the years, I found this was the most common area for failure, especially when you were half way thru a job. You need to get that wiper adjusted so that it doesn't lock the unit up, but still allow a good clean contact. The other main area of failure is the carbon pick up strips on the back of the display itself, especially thru condensation, you will get spurious readouts on the display. That requires a rather delicate strip down job of the whole display unit and the tracks very carefully cleaned down with methylated spirits.
Using digiverns and read heads of this design is fine, but I found that were rather unreliable at the best of times, even when well protected. Eventually, after about 3 years, and having many spare heads to swap over at a couple of minutes notice, I gave up on them and went to glass scale versions. After spending copious amounts of money replacing the scales, it worked out cheaper and less frustrating in the long run to swap over.
Don't get me wrong, they are a relatively cheap method of getting a DRO system, and they do work accurately most of the time. But this type of scale, no matter what anyone tells you, is not designed to work in the environment you will be putting it into, especially if you use suds as well.
The only reason they manufacture the scales in all lengths is because people still think they can get a good working system from them, and the manufacturers will continue to produce anything if it makes them money, whether it is fit for purpose or not.
I do still use one of this type on the quill Z axis of my mill, but only because it is out of the way of all the nasties, plus I have done away with the battery problems (another thing that needs to be addressed) by running it on a small power supply that a friend very kindly made for me.
That is just the way it didn't really work for me, it just might be OK for yourself.
BTW, when mounting it onto the tailstock, you really need to get something on there to compensate for the twisting motion of the barrel. I would suggest a double ended ball joint available from most model shops.
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