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The Carriage encoder is located under a gray cover (see photo below) under the carriage on the lumber feed side of the saw. If you think the carriage encoder is bad and needs to be replaced follow these steps to replace it.
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The centerline encoder is the counter that tracks the position of the vertical movement. The centerline encoder is located either on the end of the shaft for the (older) Joyce actuator style or on the end of the shaft of the gearbox (newer style) behind a gray cover.
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Document explaining how to replace the scrap motor on the Retro C
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