I like the concept of this idea. I would want to use it to make a wave pool so my dwarves can learn surfing. So there are a few refinement I would like to suggest.
1. Building has 4 attributes set at the time of construction.
1a. Size (1x1, 3x1, 4x2, etc) using the same interface as bridges. It would use 1 block per square occupied, and affect the number of mechanism required to build it.
1b. Orientation, this controls where it retracts to, pretty much straight forward.
1c. Speed. This would be used to determine how far it throws and object or knocks a person back. A calculation for power requirements absolutely must take this into account. Also this should affect the number of mechanisms required to build it, as some would be considered complex gearing.
1d. Strength. This controls just how much it can push or lift. If the load being moved exceeds the strength then it stops just like a floodgate does when something is in the way. This should have an automatic minimum set based on the size of the construction, as it has to move is own weight too.
Among other thing I want all squares occupied by it to be impassable when it is extended. I would also want it to block flows like water and magma, as that would be needed for it push water around to make my wave pool.
A note about atom smashing, if the rod extends right to a wall it should definitely crush anything between it and the wall,as long as it has sufficient strength. I am not sure about how to figure whether it would crush a creature or dwarf, but for objects I would say it takes 50% more strength to crush objects. Since we are using the objects weight to determine whether it can be moved it is pretty easy to decide whether it should be crushed when the wall is encountered.
Use as a lift would definitely be cool. I can't really see it extending up more then 1 level. When up it should make a walkable floor on the level above, and crushing would be determined by the presence of a floor above it. Uses as a lift would require that it be considered as supporting for cave in purposes.