Ok. I don't see a reason why the encoder you couldn't get to work will not work. Did you connect as follows
encoder pin CLK to chosen Arduino input for A
encoder pin DT to chosen Arduino input for B
encoder pin GND to Arduino GND
encoder pin + to Arduino +5V
encoder pin SW to chosen Arduino input for shaft push switch (optional)
The info I've seen does not seem to mention the +5V supply connection, but in my experience some encoders can be fussy without using external hard pull-ups. Grayhill branded encoders even recommend resistor values. Even if the Arduino implementation uses the internal weak pull-ups of the Arduino I'd use the external pull-ups on the KY040 board. You do this by connecting the + pin to +5V.
Give it a try it may work.
Search KY040 for more information.
Sling
Arduino and Quadrature Rotary encoders: LUA Script
Re: Arduino and Quadrature Rotary encoders: LUA Script
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Youtube Channel https://www.youtube.com/channel/UC8ZqXX ... kfZMq5BKig
Air Manager API Tutorial Video Series https://youtube.com/playlist?list=PLNr0 ... baT4gJKg5D