While it doesn't explicitly state it in the article, it appears that the encoders in question have single ended outputs. It appears that the extenders convert the signals to differential mode, which is much more noise tolerant. Shielding is a good idea, but with single ended signals I doubt it would have been enough if there is serious high frequency switching noise all around.
Having built and serviced CNC plasma cutting machines, proper shielding of cables does wonders. The comercial products we used all had shielding built into the harness to keep the noise out. And the shields were always grounded at 1 end only., and in some cases where the design was older and more sensitive they actually had 2 shields, insulated from each other and each one grounded at opposite ends of the cable.
Also - effort should be made to seperate the motor and encoder cables. Often just having them shielded and a few inches apart is sufficient.
You mention using shielded cables. Did you ground only one end of the cable shield ? I have seen installations with both ends of the cable shield connected to ground, which makes ground loops a concern.
Festo's BionicKangaroo combines pneumatic and electrical drive technology, plus very precise controls and condition monitoring. Like a real kangaroo, the BionicKangaroo robot harvests the kinetic energy of each takeoff and immediately uses it to power the next jump.
Design News and Digi-Key presents: Creating & Testing Your First RTOS Application Using MQX, a crash course that will look at defining a project, selecting a target processor, blocking code, defining tasks, completing code, and debugging.
Focus on Fundamentals consists of 45-minute on-line classes that cover a host of technologies. You learn without leaving the comfort of your desk. All classes are taught by subject-matter experts and all are archived. So if you can't attend live, attend at your convenience.