Hi sdavenport,
Thanks for sharing this.
Another approach you might consider is that instead of switching feedback modes for the Z axis channel you could leave the Z axis with encoder feedback but wrap an analog position loop around it (dual loop). In some cases this can be more stable and easier to tune than using the analog feedback directly - for example the case where the analog feedback is very slow like with your first isolator. If you would like to pursue this let me know and I can provide more details. But it sounds like you have things working well using the analog feedback directly.
Regards