Disk drive comprising gray code implemented with servo bursts

A disk drive is disclosed comprising a disk including a plurality of servo tracks defined by a plurality of servo sectors, wherein each servo sector comprises a plurality of servo bursts. The disk drive further comprises a head actuated over the disk. A servo sector is read to generate a read signal which is processed to demodulate the servo bursts into a position error signal (PES) representing an offset of the head from a target radial location on the disk. The read signal is also processed to decode the servo bursts into a Gray codeword representing at least part of a servo track address, wherein the servo track address represents a servo track the head is over.