It's in the US, but Stock Drive Products has a tremendous assortment of timing belts and pulleys for such uses. I used timing belts and pulleys of this sort for different application on a 'scope.
https://sdp-si.com/eStore/
Also, I think the next generation of US Digital's encoders have a lower profile than the older models....
http://www.usdigital.com/products/s5/