Several people have constructed rotary controllers for use with Tempest 2000 using an old pair of Indy 500 racing paddles.  While they work, they are just barely adequate.  A much better solution is to construct an optical rotary encoder.  This is easily done with cheap parts from  Happ Controls. I am in no way affiliated with this company.  I list them simply because I had no problems with them when I purchased my parts.

The Disclaimer (blah,blah,blah)
    Standard BS here.  I assume no responsibility for you killing either your Jag or yourself while attempting this project.
I haven't included every minuscule detail involved in construction.  If you are reading this, I assume you have enough soldering experience to construct such a device.  If you need more details, mail me.

Picture of components

Happ Part #
A052-1010-00  PCB (heart of the encoder)  Sold for $15.80 in 1997 Catalog.
43-0118-00 E-clip
95-6970-00 Shaft to mount the knob & encoder wheel onto.
96-6092-00 Brass bearing (shaft goes into this.  Also mounts 96-1011-00 to 95-6969-00)
96-1011-00 Plastic mounting tab
95-6969-00 Metal bracket.  Attaches to PCB.  Aligns encoder wheel with detectors on PCB.
95-6971-00 Wire harness (4-pin)  This part is optional.  Connects to PCB/
43-0989-00 Nut.  Screws onto 96-6092-00.  Clamps bracket and clip together.
95-0580-00 Metal encoder wheel.  Mounts to bottom of 95-6970-00
95-0003-00 Screw.  Attaches 95-0580 to 95-6970 and attaches A052-1010-00 to 95-6969-00

The entire deal cost under $30.00 if I remember correctly.  I have included assembly directions in the above parts list, but common sense dictates the only way to assemble the unit!

Interfacing encoder to the Jaguar

    There are two ways to do this.  The easy way is to get a cheap used Jag controller and destroy it (take it apart and use the PCB and attached wire harness).  If this offends you, the other option is to build your own PCB and wiring harness.  This is a major pain!  However, it saves the life of an innocent Jag controller.  I will leave the decision up to you.  If you do plan to build your own PCB, the necessary parts are available at any electronics parts store.  Mount the components on perfboard.  I recommend soldering all connections.  Be careful with the IC.  It is a CMOS device and very static sensitive.  Use an existing Jag controller as a template.  DON'T wire anything wrong!

    With that out of the way, a simple explanation of rotary encoders will help.  The detector uses two emitter/detector pairs which are offset by half the distance of the "slits" in the wheel.  This offset produces a 4-bit output, allowing the direction of rotation to be determined.  The output is:

 CW    CCW
0000   0000
0100   0010
0110   0110
0010   0100
0000   0000

    Knowing this, it is a simple matter to hook up the output of the encoder to the Jag controller.  Simply hook up the two output bits to the left and right contacts on the Jag pad.

Powering the Encoder

    This presents a small problem.  The encoder board requires a +5VDC supply to run.  No problem, the Jag has a +5V line on its controller port, right?  Yes it does, but its output must be in the micro amp range.  It can't even light an LED!  So, how do we power the board?  Once again, there are two options.  Use a 9 volt battery (I don't know how long it will last, however).  The second option (the one I opted for) .  Construct a splitter and use the Jag's power supply to power both the controller and the Jag.  This will involve three parts - a 7805 voltage regulator, a female power jack, and a male power jack.  Plug the Jaguar power supply into the female jack.  Run one power cable into the 7805 regulator, then into the controller PCB.  Run the other end into the male power jack and then into the back of the Jag.  OBSERVE CORRECT POLARITY!!!  I am 99% sure that the Jag has no internal protection against reverse polarity!