kel80 - having lost MANY Phals due to root rot,
this is what I would do. Everything stated above by other posters, AND I would (yet again) re-pot into a finer mix. (keep reading everyone...!) I am not a fan of bark at all, regardless of the courseness. It was my primary source of why I lost so many plants in the past. If it is available in your area, try Aussie Gold or a similiar homemade mix of mainly coir with perlite, charcoal and/or dynarock added. Sprag moss is also a good choice BUT with either recommemdation above you will need to be extra careful with over-watering. More water will not cure your plant at this point. I recently saved a Phal from certain death using AG and a foliar spray of worm tea. I cannot believe the results and the plant is now growing a new leaf and has enough root structure to secure itself in the pot. I promised on another thread to post pictures of my 'Orchid ICU' protocol this weekend since it worked so well for me. Also, check out Cynthia's 'skewer method' for checking the moisture level of your medium nearest the roots. Terrific, easy method that I have learned to rely on greatly! Good Luck with your sick baby!
Any Old Timers - How do I add a link to a post? i.e. cynthia's skewer method?