On the inside of the dust cap, there is a cylindrical step that fits into the hub of the spindle which gave me a perfect guide to drill a 1/4" hole through the cap for the encoder. After some fit checks and measuring, I’ve ordered some 3/8" rubber bushings that will go down into the spindle. From there, I will have to cut a 1/4" hole in the center for the rotary encoder to fit in. Finally, the stem on the encoder is too long, so I’ll need to hit up a local hardware store to grab a 1/2" spacer.
I’ll grab some pictures in a bit…didn’t think to do it while I was poking around.