I finally had some time to work on the software side of things in the last few days. I modified the OpenMoCo Menu Manager to work with a rotary encoder, and got it working today displaying a menu for my other project the Tannerino. I've uploaded the modified library to my Github account, and hopefully by Sunday I'll upload a concise example for using it.
I decided to go with the PinChangeInt library and not with the SCoop library, as I'm trying to make the code base for the whole system more concise. I plan on adding a 4 rotary encoder shield, which will probably depend on an additional microcontroller, and I believe getting 4 encoders deciphered will work better with an interrupt based system.
Since I'm waiting on both the boards and the PCBs (which should both be here by sunday), I'm using a '595 for bitshifting the characters to the LCD. When I'll get the MCP23s08 I'm going to modify Adafruit's version of the LiquidCrystal library to work with either an MCP23s08 SPI, 74xx595 SPI, as well as (the already written) MCP23008 I2C. I'll probably have to get an Arduino Mega as well, and configure the library to work in parallel mode with the RepRapDiscount Smart Controller Mega breakout.