New x-axis encoder failure

I replaced this encoder in February of this year due to an intermittent Z CH Missing error. This is a 1994 VF3, the encoder was replaced with a new unit from Haas. I finished the job I was working on within a few days and the machine has sat mostly unused since. This weekend it failed again with the Z CH motor fault alarm on every rotation. Long story short, encoder is the issue with less than 40 hours on it.
I found that the encoder would not turn smoothly so I disassembled and found lots of white corrosion between the aluminum housing and steel base as well as rust on the screws inside. A closer look at the scale and it appears one section is worn off from rubbing the sensor.

I have a new one coming, it would be nice if it lasted a bit longer. We still had a couple months of winter left when it was installed, I heat only when I am in the shop in the winter but it never gets below mid 40s with the heat off. In the summer it is always AC.
My plan is to throw a small dessicant bag in the servo cap and make sure it seals up good. Hoping that will dry out any moisture that remains. Am I missing anything? Does anyone think the encoder could have been rubbing from the factory?

Attachment 469592