Just as a follow-up...
I installed CUI AMT102 encoders ($23 each) and they worked great from the first time I powered up the system (long back-order from Digikey but they now have 300 in stock). With 5mm/rev leadscrews, I set the encoders to 125 pulses/rev to get a quadrature resolution of 500 pulese/rev. That should give me .01mm resolution at the encoder. Sure enough, one revolution of the leadscrew via a handwheel on the stepper, caused a 5mm movement of the DRO.
Those CUI encoders come with two different mounts with many mounting hole patterns. I didn't want to drill/tap holes into my steppers (didn't know how far I could go and didn't want to take them apart) so I used an industrial double-dided tape. Cleaned both sides carefully with laquer thinner. I emailed CUI support and they said that would be an acceptable solution. So far, so good. I like having the option to go "manual" on my mill for when I just need to do a quick job that doesn't require CNC(ontrol).
B3030