Re: First HF radio..incensed a week ago...I think I blew up my uBitXv4.
The encoder output is a switch that connects the Black or Brown wire (Encoder input A or B) to the Yellow wire (ground). So most of the time the value will be high, and only briefly go low when the switch pulses it low. You can test the Nano I/O with your sketch. On the encoder short each of the leads to digital ground (the Yellow wire). The value should change from a high value to a low value when you short it to the Yellow wire. If you do get the high and low values, then you might have a bad encoder. The previous does assume that your change to the sketch is directly reading the A0 and A1 analog inputs.
I would suggest that you go back and very carefully verify that you have wired the rig correctly. You can also compare with this original wire-up from HFSignals:
I still believe that you have a wiring issue. It is too easy to cross wire the audio and digital connectors, as they both use the same wire colors. You could also have a bad/loose connector wire. The pins can get pushed out such that they do not connect to the header properly.
The less likely fault is a bad encoder. The encoder uses switches, not electronic devices, so not very likely to fail unless there was a high current across them.