Thanks for all the responses. Yes, I think sunlight reflecting from the back of the prop would be a problem. That will have to be addressed with user instructions not to position the plane so that is a problem. As for response time, I want to be able to time a 2400 RPM prop at 24" from the axis at a resolution of 0.5". That comes out to 83 usec. Not terribly fast, but not slow either. The reason I need so much resolution is that I intend to have two photo detectors offset slightly so that they can be digitized and fed to a quadrature encoder. This will allow me to track prop passes in both directions. The reason both directions are important is that I don't intend to mark a reference blade ahead of time (like competing systems do with a bit of reflective tape). Instead the system will pick a reference blade at random during the testing. Then when the engine is stopped, the system will tell the user where to add weight with respect to the blade that just went by the detector. In the process of stopping the engine it is possible for the prop to back up slightly at the very end. With quadrature detection I can track these backward transitions properly. By the way, this also means that I have to be DC-coupled. Sorry, Dick, A-C coupling would have been a nice idea, but it a luxury I cannot use. Yes, the balancing process is slow and iterative. At each iteration some weight is added or removed. But it is of great value to reduce the number of iterations by making more accurate measurements. Starting up an airplane engine is a big deal, safety-wise and with respect to wear and tear. You don't want to do it more than absolutely necessary.
However I am beginning to think that schmitt trigger was right at the beginning. Perhaps I can ensure enough illumination that a wide range of sensitivities is unnecessary. So maybe just a second stage switchable gain is best. I will have to do some tests to see.