cutting all of the traces near the switches by scoring the board with a utility knife should work, correct?
It SHOULD work, but it's much better to remove a small section of the trace to ensure there's no chance of reestablishing an accidental connection if something brushes against the cut trace and pushes it into contact again.
I remember years ago working on this one PCB.
When you'd test it with the ohmmeter, it looked normal, but when 5v was applied, it shorted.
Over the next month, several others attempted to repair the board, but weren't able to isolate the problem.
Turns out that one of my coworkers was a bit sloppy when doing the initial trace repair/soldering and epoxy backfill.
I found a series of microscopic solder globs in the epoxy that provided a path for the higher amperage 5v supply to arc over, but not for the very low amperage ohm-meter.
Once I carefully excavated the solder globs and re-epoxied it, the board worked fine.
One last question, why do you think the computer will not recognize the board when "select" is connected, regardless of the button it is connected to?
Does it still do that when you disconnect all other control wiring and use a piece of wire to short select to ground? (removes all other variables and tests just that input on the board)
I'm not familiar with the MC Cthulhu encoder, so I will leave any further in-depth troubleshooting to others.

Scott