Ok Just to follow up my own question, they do not work with the USB to PS2 adapters as far as I can tell, i have 2 different ones and both just cycle titles (HYPERSPIN SETUP). I used a keyboard tester and it all works great, joysticks hit correct buttons, no stuck keys etc.. but run hyperspin and hit a joystick, whacked out.. The encoder and setup worked fine on old machine (it died, PSU issues) so i upgraded.
SO if anybody still reading, is there an encoder that uses the same pin outs the hagstrom used ( 40 pin ide )? I really hate to rewire the whole dang thing since its all wired to two IDE 40 pin convectors that just plug in (i swapped control panels at one time and this was an easy solution before all the USB encoders came out).