Am I right thinking that 100P/R is a bit on the low side and 400P/R is more than enough for a 270 wheel?
I don't want ultra high precision, just something that works better than a pot and have the full 270 range.
Which are you trying to build?
A 360 (optical) wheel or a 270 (potentiometer) wheel?
Generally speaking, neither one "works better" than the other.
Some games are designed for a 360 wheel, other games are designed for a 270 wheel.
360 wheel games use a relative wheel position -- like a mouse, there is no center position only moving right/left from your current position.
270 wheel games use an absolute wheel position -- like a volume potentiometer, the volume of the audio depends on the exact position of the potentiometer.
Let's go back to your original post.
If you're trying to make your current 270 wheel work over a wider range of motion than 90 degrees, forget about optical sensors and focus on the potentiometer and analog encoder.
Set your multimeter to Volts DC and connect the leads to the center tab and one of the outer tabs (either one will work for this test) on the steering potentiomer.
When the wheel is centered, you should get a reading of about 2.5v.
When you turn the wheel, that voltage should change.
1. What are the lowest and highest voltage readings you get? (0v-5v? 1.4-3.6v?)
2. How many degrees do you have to turn the wheel to go from the lowest voltage to the highest? (90? 270?)
These two answers will determine if the limited-range-of-motion problem is with the potentiometer or the analog encoder.