Open Source Digital Readout
Re: the concrete machinery, I just saw this today http://hackaday.com/2011/09/27/they-may-be-for-developing-countries-but-we-want-a-concrete-lathe/
For the DRO, I found lots of info by googling: diy dro
There is a very good quality open-source DRO made by Shumatech, but see comments on discussion page.
The quickest, cheapest way is to adapt a long off-the-shelf digital caliper to each axis. It should be possible to hack the circuit for feedback to a control system for CNC.
Eventually I would photographically replicate a master optical glass scale into many low cost copies and make the optical readout heads ideas-
While it will never match the precision of a glass scale or interferometer, don't forget the encoded Trav-a-dial concept