In my opinion, I would remove the entire spike with the flowers and buds on it. I would concentrate all my energies into allowing the mother plant to give all it's strength to growing the one baby Phal. I don't think it would be in the plant's or your best interest to get too greedy here.
Seems a little premature to write this thing off just because it has a yellow leaf. Leaf death is a regular activity. It doesn't necessarily mean that the plant isn't healthy. Growing a keiki is not a sign of disaster either, it's a normal thing.
If you have keiki and you want to retain it, then just let it grow. Sometimes we make this stuff too complicated. I wonder who tacked down keiki's in the wild?
I was also wondering if the 2 leaves that are yellowing are the only 2 leaves or are there more healthy ones on the plant? I couldn't tell for sure in your original post. That would tell a lot.
Yes the leaves that are yellowing are the only two leaves on the plant, and they are getting yellower day by day.
So I think this plant, for whatever reason, has reached the end of its lifespan. I will "rescue" the keiki as you all suggested, cut off the other spike w/the flowers, and then speak kindly to it andperhaps it will ressurect itself.