LED frequency indicator for multiturn knob
You are trying to describe a very Rube Goldberg type of mechanism for something that should be done in a much more uncoupled manner. You should come up to speed what microcontrollers are all about. Have the microcontroller (MCU) able to detect position of the knob (which can now be a simple potentiometer feeding an A/D converter OR a rotary encoder feeding quadrature waveforms to two inputs). The MCU would also control the display and run the VFO. You tie all this together with software that can easily solve the problem of when the display should change in relation to how the rest of the things change.