This paper deals with the 2-dimensional paddle juggling where a racket hit a ball vertically and iteratively. The racket rebound model is considered where both the translational and rotational velocities of the ball change at the rebound due to the effect of the racket rubber. The LQ servo controller is derived based on the complete ball transition with the racket rebound model. In addition, a whole observer system to estimate all the ball states is proposed which consists of a continuous one for the free flying ball and a discrete one for the ball rebound. Note that it is essential that the rotational velocity can be only estimated by the discrete observer at the rebound. A numerical simulation is performed in order to verify the effectiveness of the total discrete output feedback controller.