You can measure the output voltages of an encoder with a multimeter only if the encoder is NOT rotating. So you have to turn the encoder VERY slowly until the output channels reach their maximum and minimum voltage. If you measure the voltage when rotating the encoder readings in the DC will be erratic - most multimeters are not very precise when measuring almost "rectangular" waveforms and when the output frequency (pulse rate) is low you never know whether the pulse was long enough to meet the acquisition rate of the multimeter.
I have not read the entire thread but when using encoders with non-differential open-collector output usually you have to use pull-up resistors going from the output to the supply voltage (5VDC). The exact value is not critical, if you just can get 3kOhm instead of 2.7kOhm the circuit should work OK.
I cannot see any reason why the encoder you have chosen should not work with the UMI box. We are using very similar encoders from HP (Agilent), we have used them occasionally with the UMI box and had no problems. However, virtually any encoder with differential outputs should work OK with the UMI box. Most use the AM26LS31 driver IC (or its C-MOS low power equivalent, the AM26C31).
