look up one thread to the one that says "den emma white"--jerry has posted care tips on there. in short: lava rock fine. yes they like to be root bound. papery covering on canes normal. how often are you watering? if the plant is in straight lava, then you have no worries about the medium rotting.
if the roots are coming out all over, then i would "pot on": get a 4 inch pot, pry the plant out of the old pot (water well first to soften the roots) and stick the whole thing in the new pot. pour rinsed lava rock around the "root ball" and bang it on the floor a couple times to settle the rock in the pot. then you're good to go. the plant may need to be staked for a while. be careful of top heaviness (see "tough plant" posting below.
)