Hi West,
Definitely is something wrong with the enconder.
When you send the car down to next floor the drive receive a certain number of pulses from down encoder, so you need to check floor by floor and 2 floors by 2 floors, and see on controller how many pulses do (If do the same pulses like up encoder).
By error codes the 54 it says: "UP & DOWN encoder motion detected 1.5 seconds after the valve de-energized".
Hope can help you.