0.005 error randomly accumulating over 30.000 inch travel, solutions etc ??

This sounds like a noise issue to me. I would suggest trying clamp-on ferrite beads on the encoder cables.

The encoder frequencies are really low and should not be a problem for hardware decoding. Software decoding would probably have issues though.

I don't get your complaint about the quadrature decoding. The 4x decoding is very standard and you can still do error detection with a state machine that flags illegal transitions. Limiting yourself to 1 count/line will not improve noise immunity and just reduces your effective resolution. Encoder inputs should be error free and this is quite achievable with the noise margins in the system. An error rate of better than 10^-12 (or one every 100days at 100kHz encoder rate) is easily achievable. Realistically the error floor is more likely to be around 10^-15 and effectively zero.

My mill has 25400 counts/inch and at 600ipm and 30" of travel I have seen zero lost counts. The machine has been running for over a year now with no problems with repeatability. This has been checked with a renishaw probe system and the machine will repeat to the um when probing.

it's not a noise problem. But I will give everyone a hint. 6.92  you'll figure it out eventually. Now I have to get back to debugging my complete rewrite of encoder.c sorry, uploaded older version with broken Z output. on another note, this has got to be the worst forum software I have ever used. god this is awful.

my encoders generate 49152 pulse per inch. i don't have a problem with quadratic counting, i have a problem with how that is being handled currently 

engineering.purdue.edu/~dionysis/EE452/L...er_Guide_sprufk8.pdf Absolutely required reading, and I have been running encoder simulations and looking over the code, it is very possible in some edge circumstances that clock alignment at high frequency's might be causing a loss of pulses or a buffer overflow in certain conditions. I have seen counting errors at very high count rates and small off periods over extended periods of time, we are talking 1,000,000 or more pulses, which is in the range of where I see trouble.