Yeap I was looking at making a linear encoder using a string and the AS5047, see pictures here:
https://groups.google.com/forum/#!topic/mechaduino/A0VR1HhEY5E
I have looked at the AS5311 in the past, but the magnetic strip/tape that is needed is expensive and hard to come by. I even got a evaluation board to test as I heard that common magnetic strip tape would work, which was false.
As far as the Zero goes, I was needing a Zero that was small for some audio device, so I created one with the same footprint as the Arduino Nano,
http://misfittech.net/product/nano-zero/. If I could get volumes of sales high enough I could significantly lower the price.
Trampas