Im not convinced the Heidenhain sensor is a great design - seems to me like it bashes itself to pieces at either end of the scale.That is poor installation, not a design fault on the scale. It is usual to specify a scale of longer travel than the slide & position it so that the reader head stops 10mm or so before the end of it's travel when the axis dead-stops. This is a precision measuring device - not an external mechanical dead stop ! When mounted, it should be accurately aligned with the axis in both planes (better than 0.01mm over the full length IIRC) and the reader head set to the specified clearance (1mm IIRC for the slim scales - 1.5mm for "standard" scales, though on those the head transit clamps incorporate a gap setting function).
The slim-line scales were a bit of a challenge, as the reference marks were close-ish to the ends of travel. They had to be positioned pretty accurately initially to be able to get to the reference mark but not hit the reader head on the end of the scale before the end of axis travel.
You may find some info here :
http://www.heidenhain.co.uk/en_UK/documentation-information/documentation/manuals/The General Catalogue gives dimensions & mounting tolerances for the current families of scales.
I seem to recall that Heidenhain did not supply replacement reader heads for the slimline scales for the user to fit - something to do with having to set something up on a test rig to get the signal levels correct IIRC. The larger scales were no problem & I have changed many of those (all in CNC applications). Usually it is the lamp that fails - they used to use a 12V lamp on a 5V supply, which gave a dim glimmer of light through the gratings onto the photocells. The upside to running a lamp at a much lower than rated voltage is greatly increase life - 20,000 hours IIRC. Later designs used an Led, which seem to be almost infinate life. Heidehain scales are an industry standard for very good reasons - they are very accurate, repeatable and reliable.
If you want to use a different manufacturer's scale, Heidenhain used to use an 11 micro-amp sine wave output not 5V TTL. That changed to 1V peak-to-peak sine wave output a few years ago. The scales were available with 20 or 40 micron pitch gratings that were interpolated by the control electronics to get the required display resolutions. I seem to recall that Newall did a replacement Spherosyn or Microsyn scale with a Heidenhain-compatible output. Heidenhain do signal level converters, but the versions I have seen convert 11 micro-amp or TTL scale outputs to the current 1V peak-to-peak level.
The 11 micro-amp connectors are a round screw collar secured 9 pin design, with one large central pin & the other 8 smaller pins arranged radially around the centre. 1V peak-to-peak and 5V TTL versions usually use an externally similar connector with 12 small pins.
I have replaced a Newall readout & scales on a Harrison lathe at work with a Machine-DRO Chinese budget console & glass scales. Good price, quick delivery & it has been working fine for 2 years now. I have another of their budget 2 axis consoles & 2 magnetic strip scales in my office at the moment to retrofit to a tool presetter - around £400 total, where the Swiss presetter manufacturer quote £2500 to replace two Trimos capacitive read heads !
I am not a great fan of the Newall arrangement - robust & reliable on shorter lengths maybe, but I had "issues" with accuracy on longer length applications due to the rod drooping like a washing line. When postioning accuracy was checked with a laser, this could clearly be seen and for that particular application (CNC Vertical borer X axis) the Newall arrangement was subsequently changed for a Heidenhain scale.
In your position, I would probably replace the lot with a Machine-DRO system complete. 3 axis, with another scale on the knee.
HTH,
Nigel B