If I try a good running car without the encoder connected car runs a little bit then faults with a 98 error.Whats weird is this car was running full speed and was on inspection before with no problems. This is an older babbit bearing otis machine, I know the circle W machines don't drift very well!
Check to see if the interpole are rocking and shorting out against a motor field connection. Very similar to what you're talking about as far as results. Only seen it once in 30 some odd years, but I wont forget it.
I have two old Westinghouse gealess machines with futura controllers. One of the units was over speeding and banging pretty bad. Magnetek and CEC scratched thier heads with me as well! We were getting no indication from the fault log to give us a clear direction.
What I found was the velocity (vel) and speed reference (sr) were off. The encoder appeared to be fine as well as yours! What I discovered was the encoder shaft had too much play. Not too much play clock- wise or ccw but in and out!
This play of the shaft moving in & out affected the optics inside the encoder. It was as if the elevator was trying to launch into orbit.
I recommend you take off the encoder off again and and check the play in & out. If it is sloppy replace it. The encoder on the other lift may work fine on that unit and not on this one. Best of luck!
I hope this is a sign that I'm losing my mind first!