It looks like I threw it together in a day because I did. I also can't solder anything so it will probably stay the way it is.
This is what I started with: a clamshell rotary phone, probably from a hotel. I have no idea how old it is. You can buy one off of eBay for about ten dollars.
The finished product. I may move those electronics inside the device to make it look less like a bomb.
Opening the beast. I disregarded most of the electronics inside.
Testing the rotary mechanism. I pulled off four wires and hooked them up to an LED circuit to see how they would behave as I dialed numbers. As I suspected, one circuit closed when the dial was in motion, and another flipped on and off, counting up to count the number you dialed. It was easy to then hook these wires up to Arduino digital pins and count the numbers in software.
I had a lot of help from these instructions: http://www.instructables.com/id/ArduinoPhone/
This helped me get the handset working: http://www.instructables.com/id/Adapting-a-Telephone-Handset-to-a-Cell-Phone/
I used an Arduino Uno and Seeed Studio GPRS and TFT touch screen shields.