Just a quick update. I decided to buy the C3 breakout board since I could not find an opto that I KNEW would work. I should be getting it early next week.
In the meantime, my hall effect switches came in the mail, and I built a circuit.
Basically what I am doing is taking the output from the hall switch and going into a NPN transistor through a 10k resistor. The collector goes to the ground of the G540 which connects to pin 12, and the emitter is going to pin 1 (10) as an input on the G540, and I am using a 12V power supply to power the circuit and connecting ground to the G540 ground as well.
I breadboarded the circuit and it was working as expected yesterday. As I moved the magnet past it, the index light in diagnosis toggled. As quickly or slowly as I moved the magnet past it, it seemed to respond.
I than soldered the actual circuit today, hooked it up and not working. I spent two hours troubleshooting it with a multimeter, and it seems that my 10K resistor is not working properly. Ironically I tested the resistor before soldering, and it was working fine, so something happened to it while soldering. I can see that at the connection from the start of the resistor from my output of my hall switch, I am getting about 6V, when switched on at the other end of the resistor, I am getting nothing at all. When I use the ohmmeter function of the mulitmeter, I am getting no reading at all on that 10k resistor.
So hopefully that is the problem, but I ran out of time to replace the resistor. I hope to be able to do that tomorrow morning and hopefully this thing will work.
At that point I will be able to compare this circuit to the C3 to see which one works better. If both are equal, I will use whichever one is easier to mount/protect.
I thank everyone again for all the help, particularly Hood!