Flowers dropping, roots rotting

[Mangomama]

Help!
I've had my phal from the supermarket since late November. It was doing really well, has two stems, tons of potential blooms. But blooms have been falling off slowly one by one - I expected them to last longer. Just a couple of weeks ago five or six fell off at the same time, yikes! So I am only left with one bloom at the end of 3 branches. I am hoping that these will last, and that new blooms will keep forming.

It is planted in a plastic pot inside a larger ceramic pot, and they fit so closely together that I was not aware that when I was watering, the water was not evaporating but collecting underneath. So I now have many rotted roots, and others that are green but don't look very good. Only yesterday was I able to find watering instructions that said that I should water the plant over the sink and let it drain, not directly into the pot.

So, I am hoping it is not too late to save this orchid. Should I let it dry out completely? Can I leave the roots the way they are or should I repot? I am afraid to repot in case it causes too much stress, and in case the damage is worse than I thought. So far the last blooms are still doing well.

Thanks ahead!
Grace