I've seen numerous home-made DRO mods that use readily available digital calipers, but they have several drawbacks. Foremost among them is usually the auto-off feature that can't be disabled. They lose their setting when they turn off, making them only useful for a small time window of inactivity. Bit of a pain, really.
Also, they are somewhat limited in size, so while useful for most desktop size machines (at least on the cross slide and/or quill) they don't have the range needed for a larger machine like a 3-in-1's cross slide or even a desktop lathe's full bed length.
It appears most of the chinese DRO offerings use the same capacitive measurement, and you could take advantage of this and use a particular circuit to increase the length, but at some point your time is better spent making money to buy a full-scale DRO instead.
Ingenuity FTW, however!