I have bought a [beautiful old radio](https://i.stack.imgur.com/lvfOh.jpg), which I'm trying to convert into a DAB radio ([there's no future for FM radio in my country](http://www.npr.org/sections/thetwo-way/2015/04/20/401026037/norway-becoming-first-country-to-eliminate-fm-radio)).

Of course I could just use a DAB receiver, plug it into the old radio's speakers, and be done, but there's no fun in that. Instead, I want to be able to operate the old radio, turning its knobs and pressing its buttons. So that when I turn the tuning knob, I'm switching between DAB stations instead of tuning between FM frequencies.

The first step (at which I'm stuck) is to translate the position of the tuning knob (A) into a digital value I can use to control a DAB receiver. I'm a programmer, with only limited experience in electronics, so I'm not sure how to best accomplish this.

[![Overview](https://i.stack.imgur.com/qdMGn.png)]

Originally, the radio displays the frequency with a vertical bar (B) that travels over a frequency band (C). My idea is to attach *something* to that bar (or to the carriage that the bar is attached to), and **measure the distance (D) between the bar (B) and the inside wall of the radio**. If I could do that with some electronic component, I could get a signal that I could translate into a number that again could be used to select a DAB station.

The problem is that space inside the radio is limited. 

Images
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[This image](https://i.stack.imgur.com/qdod1.jpg) shows a horisontal, round bar on which the frequency bar moves along. When the radio is fully assembled, the speakers are located on top of this, leaving about 1cm space between the horisontal bar and the speakers. It must also [go clear of two lightbulbs](https://i.stack.imgur.com/7bMVn.jpg) (for illuminating the frequency scale).

The frequency bar is sandwiched between the glass dial scale, and a metal plate. [Here's](https://i.stack.imgur.com/UZFMl.jpg) what it looks like from above.

[Here's the back of the tuning knob and its shaft](https://i.stack.imgur.com/eKI6g.jpg). As can be seen, there's not too much space here. The knob is dual shaft - [the outer ring is the speaker selector](https://i.stack.imgur.com/DKlhd.jpg).

[Here is a birds-eye view of the interiors](https://i.stack.imgur.com/ZkmES.jpg), when taken out of the enclosing cabinet. And a [close-up of the variable capacitor's shaft](https://i.stack.imgur.com/JgUPa.jpg), as per Transistor's request.

Oh, and [here's the schematics](https://i.stack.imgur.com/ZpGyZ.jpg), if there are any Norwegian speaking radio enthusiasts out there.

Here are the options I have investigated/tried so far:
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* An ultrasonic rangefinder (like <http://letsmakerobots.com/node/30209>)  

These are too big to fit. Also, I doubt I would get any sensible signal from it, as there are many parts inside the radio that would reflect the ultrasonic waves. The same goes for [infrared rangefinders](https://www.sparkfun.com/products/242).
* A slide potentiometer (like these: <http://www.potentiometers.com/select_slide.cfm>)  

The ones I have found are difficult to fit, and there are not many that are longer than 10cm. The radio is ~50cm wide, so that would leave most of the band unused.
* A SoftPot (like <https://www.sparkfun.com/products/8681>)  

These works by reacting to mechanical pressure somewhere on the surface. They come with an "actuator", which is basically a screw with a round, plastic tip. This was promising - I attached the actuator to the part moving the bar, and let it travel along the softpot membrane. However, the tuning knob is carefully designed so that when the bar reaches one end of the scale, it stops moving, because the wire (E) that drives it will start slipping on the tuning knob to avoid damage. The pressure needed to activate the softpot was enough to cause too much friction, so that the wire was slipping, and the bar did not move.
* A string potentiometer (like these: <http://www.unimeasure.com/>). I could attach the string to the bar, and the stringpot housing to the inside wall. However, most stringpots I have found seem to be meant for heavy industrial use, and are priced and dimensioned accordingly. The added friction could also be an issue.

What other options do I have?