Is there a way to take a signal from a phototransistor, filter out non 40 kHz square wave signals and then be able to read the strength of the signal with an ADC?

signal from phototransistor ---> filtering ---> if 40 kHz wave then read level of signal with adc as you would normal do with a phototransistor output

 

That sounds doable, Vishay makes a sensor that might work off the shelf for what you want. The output pulse width is proportional to intensity. It should be easy to convert that to a voltage and feed an ADC, but it would probably be even easier to measure the pulse width directly with an MCU.

http://www.vishay.com/company/press/releases/2010/100628irsensors/

Many other applications require a reflective sensor that detects not only presence but also proximity by measuring the strength or weakness of the reflected signal. Instead of a fixed detection threshold, analog information from the sensor is needed. This is possible with the TSOP4038, TSOP58038, and TSOP58P38 IR proximity sensors. The length of the sensor’s output pulse in response to the emitter signal varies in proportion to the amount of light reflected from the object being detected. For near objects, the output pulse approaches 100 % of the emitted pulse, for far objects the output pulse becomes shorter.

John

 

good find right there, although the way the detector is mounted in casing will not work for my application. I will take a look around to see if there are any similar items with other manufacturers.