Hood - no, it doesn't work with Jog mode set to MPG.
I have learned more. The problem seems to be that I am getting a signal from the MPG encoder pins only when Reset is ACTIVE in Mach. When Reset is active (button flashing on Mach screen) I do get indicators on the status display in the Diagonostics screen as I rotate the MPG wheel. So while it is in Reset mode, the encoder pins are working.
When I press the Mach Reset button to take it OUT of Reset mode (the Reset button is no longer flashing, and all controls are now operable) the signal from the encoder pins no longer indicates on the status display in the Diagonostics screen. At this time, the actual signals that I measure on the port are at a very low level - the high level is about .2 volts, and low level is about .o5 volts, (versus about .15 volts low and 4.70 volts high when Reset is active).
So when reset is in the Run mode, either the MPG is not outputting anything, or the port pins are being pulled low by the computer. It seems to me more like the latter, because there is some indication that the encoder is trying to drive those pins (Port 2, pins 3 and 4).
Any thoughts?