In the original Discs of Tron spinner... it had the optics stationary... and a center shaft that moved up/down. The center shaft had a small notch on it, which turned the outter shaft which had the encoder disc on it. Its complicated to explain, so you might be better off looking for some pics of it online.
Oh, that's how they did it...that's really brilliant!
As for my design, it's super simple. It could easily be made to work only when pushed down, by simply removing the spring between the bottom of the panel and the flywheel, and using only one switch.
I recently bought an Oscar Pro, which is mounted entirely on a metal bracket. I was thinking it would be pretty simple to mount the bracket to the control panel using 4 springs, so the whole works (optics and all) would move up and down, and just mount some switches to it... But then I realized I've hardly played Discs of Tron since I made the first one, so I decided not to muck with Oscar's beautiful spinner!
I've been considering making a desktop control panel using some of my spare parts, including the up/down model 1 spinner, and putting it up on ebay... I might be willing to sell you just the modified spinner if you're interested...