Hi,
if you look at the USdigital site (
http://www.usdigital.com/products/ ) there are many encoders listed that will retro fit to motors, some have index pulses that you could connect to a Mach input line.
You would need a micro switch to tell Mach to slow down to a very slow feed while looking for the index mark.
The encoder index mark needs to be set at 180 degrees minimum from the micro switch touch point to give Mach chance to see the index.
I tried this way and it works, the only problem is that the feed rate has to be very very slow.
I have my lathe setup slightly different, its on ball screws and DC servos with indexed encoders but,
I ended up using an optical sensor on the lead screw, it senses a slot in a disc mounted on to the end of the screw, this works better as the motor is geared 5:1 to the leadscrew so the detection time is 5 times longer. I still use the slow down switch and have it set to trigger at about 270 degrees before the index mark, the Z axis zeros within + / - .005mm each time.
The lathe is not finished yet but its getting there. I am working on the X axis zeroing at the moment.
That is why you need to use VB as Machs zeroing don't work this way.
Graham