We generalize a proposal for detecting single phonon transitions in a single nanoelectromechanical system (NEMS) to include the intrinsic anharmonicity of each mechanical oscillator. In this scheme two NEMS oscillators are coupled via a term quadratic in the amplitude of oscillation for each oscillator. One NEMS oscillator is driven and strongly damped and becomes a transducer for phonon number in the other measured oscillator. We derive the conditions for this measurement scheme to be quantum limited and find a condition on the size of the anharmonicity. We also derive the relation between the phase diffusion back-action noise due to number measurement and the localization time for the measured system to enter a phonon number eigenstate. We relate both these time scales to the strength of the measured signal, which is an induced current proportional to the position of the readout oscillator.
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