Bill.
I built this a couple or years ago. Like you I had problems getting it to work correctly. I contacted Mike who sent me the following explaination of the circuit:-
"First of all, let me explain how the circuit is intended to operate:
With everything correctly connected, and the opto slot clear, the optotransistor will be switched on by the illumination from the LED, and its collector (pin 3 on the opto switch) will be near to 0V. This will turn TR1 hard on, and its base will be at around 4.3V. The collector of TR1 will be just below 5V.
When the slot in the opto switch is blocked, the optotransistor will be turned off. The collector of the optotransistor will be pulled up to 5V by the 2k2 resistor. TR1 will be switched off, and its base will also be at 5V. The collector of TR1 will be pulled down to 0V by the 3k3 resistor.
Tr1 collector is connected to the input of the digital frequency meter (pin 6) via a 470nF capacitor. Pin 6 is also connected to 0V by a 2k2 resistor. As explained in the article, this arrangement makes sure that the display returns to 0000 when the machine spindle stops. However, because dc voltages are blocked by the capacitor, it also means that you will not get meaningful measurements with a voltmeter at pin 6 during static testing.
Coming now to the measurements you mention in your message:
As explained above, the voltage on the base of TR1 will only change by a small amount, about 0.7V, when the opto switch operates. To test the circuit it would be better to monitor the collector of the optotransistor or the collector of TR1. In both cases the voltage should change by almost 5V. You will not see much happening at the input to the digital display for the reason given above. The LED in the optoswitch has a forward voltage drop of around 1.5V, so this is what one should expect to measure at its anode (pin 1).
So, if you are confident that the circuit is correctly wired, my advice would be to check again, this time measuring the voltage at pin 3 of the optoswitch. If you see the correct voltage change here when you block the slot, check the swing at the collector of TR1."
Below is what was wrong with mine:-
Thanks for the explaination of how the circuit works. with the slot clear I got 5v on opto pin 3, 4.9v on the base of TR1 & 0v on TR1 collector. With the slot blocked I got the same values ( give or take 0.1 v).So I disconnected the opto & put 0v onto the base of TR1 via the 10k resistor, the base went to 4.2v & collector to 4.89v , Strange I thought!! I came to the conclusion the problem was with the opto.I down loaded the data sheet & found that the emitter & collector pins of the opto transistor were not as I had thought (ie the C/E markings on the case did not refer to refer to pins 3 & 4) Any way when i changed these connections the circuit functions as your description. I ran a small motor with a slotted wheel ( ex printer) in the slot and put a scope on the LED dislpay i/p lead I get a nice 2.5v amplitude square wave the frequency of which changes as I increase the motor speed.
Hope this helps.
regards Ian