FilenameUtilityTests.cs

[TestCase("Test", "Test")]
[TestCase("%Test", "%037Test")]
[TestCase("%037Test", "%037037Test")]
[TestCase(":Test", "%058Test")]
[TestCase(":Test", "%058Test")]
[TestCase(@":Test : kasgfd % askjfg \", "%058Test %058 kasgfd %037 askjfg %092")]
[TestCase(@":Test : kasgfd % askjfg \kjsafgikahfg:oadsfhoaefihlajksbfa,das", "%058Test %058 kasgfd %037 askjfg %092kjsafgikahfg%058oadsfhoaefihlajksbfa,das")]
public void FileNameEncodeDecodeTest(string fileName, string expected)
{
    for (int i = 0; i < 2; i++) // Slow the first time maybe the ctor is expensive
    {
        Stopwatch stopwatch = Stopwatch.StartNew();
        string encoded = FileUtility.FilenameEncode(fileName);
        Console.WriteLine(stopwatch.GetTimeString());
        Assert.AreEqual(expected, encoded);
        stopwatch.Restart();

        string decoded = FileUtility.FilenameDecode(encoded);
        Console.WriteLine(stopwatch.GetTimeString());
        Assert.AreEqual(fileName, decoded);

    }
}

FileUtility.cs

public static class FileUtility
{
    private const char PrefixChar = '%';
    private static readonly int MaxLength;
    private static readonly Dictionary<char,char[]> Illegals;
    static FileUtility()
    {
        List<char> illegal = new List<char> { PrefixChar };
        illegal.AddRange(Path.GetInvalidFileNameChars());
        MaxLength = illegal.Select(x => ((int)x).ToString().Length).Max();
        Illegals = illegal.ToDictionary(x => x, x => ((int)x).ToString("D" + MaxLength).ToCharArray());
    }

    public static string FilenameEncode(string s)
    {
        var builder = new StringBuilder();
        char[] replacement;
        using (var reader = new StringReader(s))
        {
            while (true)
            {
                int read = reader.Read();
                if (read == -1)
                    break;
                char c = (char)read;
                if(Illegals.TryGetValue(c,out replacement))
                {
                    builder.Append(PrefixChar);
                    builder.Append(replacement);
                }
                else
                {
                    builder.Append(c);
                }
            }
        }
        return builder.ToString();
    }

    public static string FilenameDecode(string s)
    {
        var builder = new StringBuilder();
        char[] buffer = new char[MaxLength];
        using (var reader = new StringReader(s))
        {
            while (true)
            {
                int read = reader.Read();
                if (read == -1)
                    break;
                char c = (char)read;
                if (c == PrefixChar)
                {
                    reader.Read(buffer, 0, MaxLength);
                    var encoded =(char) ParseCharArray(buffer);
                    builder.Append(encoded);
                }
                else
                {
                    builder.Append(c);
                }
            }
        }
        return builder.ToString();
    }

    public static int ParseCharArray(char[] buffer)
    {
        int result = 0;
        foreach (char t in buffer)
        {
            int digit = t - '0';
            if ((digit < 0) || (digit > 9))
            {
                throw new ArgumentException("Input string was not in the correct format");
            }
            result *= 10;
            result += digit;
        }
        return result;
    }
}