[bojan]

Originally Posted by alistairsam

Is this even possible? I'm guessing these are not optical.

I think encoders like this are possible but VERY expensive, and therefore not practical solution.
Or, you may have linear (well, bent) encoder mounted on the rim of a large wheel - then something like capacitive encoder (used in calipers) may be good enough.

Originally Posted by alistairsam

I might drive the encoder from the input of the final stage instead of the RA shaft as the backlash with the timing belt/pulley would be minimal when tensioned correctly.

You will still have some PE (because the timing pulleys are not perfectly centred).

This solution is applicable for DC motor servo loop, of course.
If you have steppers, you don't really need encoders on motor shaft (unless your motors tent to stall or skip steps).
You need them to be coupled to RA shaft instead, to have functionality similar/equivalent to argo navis, for example.