If you are into electronics What you will need is an 8 bit up/down counter connected to the step and direction outputs of mach3
and the same for your encoder then both 8bit outputs from the counters are fed to an 8 bit adder. This will give you the error signal in digital form. You will then need to convert the 8 bit error output from the adder to analouge with an A to D converter with an output offset to give the +10-10 command signal.
It might be worth having a chat with the guys at CNC4PC as they do some converter boards and I would have thought that a frontend for these old drivers would be ideal for a retrofit.
Regards
CJ