Hydraulic Proportional Valve with no amp?

Do you have the data sheet of the valve you are using now? If you are able to hold position by just turning the output off, then you must have some overlap in the center of the spool. Does the valve have onboard spool position monitoring? If the existing valve has the onboard spool position monitoring then you will likely have a pretty hard time matching the performance with your proposed new approach. If the existing valve does not have spool position monitoring then you have a better chance of making something similar.

If this is a series machine which they make dozens to 100s of per year, it makes some sense to spend the time and $ to try to use the new approach. For a one/two a year machine, I would say it's not worth it.

Once I was working on a machine that tested one way clutches and counted the sprags in the clutch housing. I asked for a servo motor or stepper motor drive to spin the shaft that got inserted into the clutch. Because of cost they designed in a 720 degree rotary actuator instead. I spent more money in my time getting the test to work with the rotary actuator than 2 stepper systems would have cost. That was a one off machine and it was extremely frustrating.

Thanks for clarifying. Sounded like a big engineering project involving a lot of valves in the field or something. Quite different when it's an OEM. The point about a hazard evaluation though is a valid point no matter what the scenario.

This is an R&D project with some risk and some reward. The risks are:
it doesn't work and you have to pay the R&D cost + the cost of the old system.
It does work, but you have to be called out to fix it / troubleshoot it because it is weird and wonderful and they didn't read the meticulous documentation you put together.
You can probably get tax breaks for the R&D component, and it sounds like this isn't a one off so you have the resources to test it properly and think through all the what ifs.
The rewards are: some Canadian dollars saved per machine. Potentially more sales.

I don't have the specs on the valves they used on the first machine, much less the new version. I was told the hydraulic circuit included some kind of balancing to keep drift from happening. The valves probably also had spool monitoring. We had some issues with the wiring during the initial testing, and during the troubleshooting I used the programming software to connect to the valves. I was only interested in the problems with the analog signal, but there were quite a few other parameters, including tuning.

I don't think they'll get out of the single digits of machines per year.

My original recommendation was to keep the amplifiers, and now I have some reasons to back it up. Thanks again.

Having accomplished a few dirty, but successful projects I would say yes. Dithering is handled in the terminal.
http://www.beckhoff.com/el2535/