
It is possible that the new expression pedal is not wired correctly and is shorting out the encoder's power while it is connected. It's also possible that you have an expression pedal that uses an optical device (the LED?) rather than a potentiometer which would be incompatible with most encoders.
Check the expression pedal with a multimeter to verify it is actually a potentiometer and that you have correctly identified the ends of the potentiometer and the wiper.