You don't have to use mag jack for the enc, most T-Base ethernet transformers will do, with and ethernet socket. Obviously using a magjack or similar with the magnetics and socket integrated decreases the required board space.
There is an issue with the current silicon revisions which destablize the SPI bus if you use a low speed clock, see the errata. As far as i remember if you use a 40Mhz clock it is fine, or if you use the same clock to drive both the enc and the pic.
If you put the enc part of the circuit together without the pic, 1 led indicates the cable is connected and the other flashes when data is passed.
I haven't tried measuring the Tpin and Tout pins but I expect with a good scope you can observe the signal.
Hope this helps,
Ian
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