Thanks I was able to get Encoder working direct to Pro Micro and then tried on matrix. I got 1 working and tried in CLOD. Was able to adjust sight distance on the Hurri. I was rapt - thanks Mega_mozg! Also added as "On-None-On" switch and got the gear to raise and lower with the On switches!
Erichos post was very helpful -appreciated.
Now trying to connect 2nd Encoder has stopped me again. I have tried connecting rows to a number of different pins and have swapped Encoders around but still get same result.
When 2nd Encoder added it treats 1 Encoder as Button 3 and other as Button 4. Rotation left and right of an Encoder records same button number and same for other encoder. When I disable 1 row in MMJoy I get the correct result of Button 1 and 2 being recorded with left and right movement of Encoder.
Is this something wrong in software setup I am doing or maybe something wrong with matrix? Also I assume that the encoders reduce the number of other buttons able to be added to board?
