Welcome aboard.
Power your cab down, set the multimeter to ohms/continuity, and hook your multimeter leads to the ground on a functioning player 1 control and to the ground on one of the non-functioning controls.
If you don't have continuity (<2 ohms), the daisy chain ground path was broken somewhere.
Find a working input where the ground then goes to a non-working input. You'll probably find the fault somewhere between them.
Based on the symptoms you describe, best guess without a picture is the ground between P2 Down (functioning) and P2 Left. (non-functioning)
Another way to check is to jumper ground from a known good point on the daisy chain to the middle of the non-functioning ground. If the whole thing starts working again, it is definitely a break in the daisy chain.
Worst case scenario, manually short a non-functioning input to ground with a piece of wire -- If that doesn't work, the problem is definitely in the encoder.
Scott