Help my mini-phal survive (bad roots)

[Nameless]

Hi everybody, I found this perfect forum and I have a question right away.

I have bought a mini phal (one month ago?). It was potted in moss which was completely soaked (the phal had some rotten roots) so I decided to repot it right away. I cut off the rotten roots and potted it into pieces of bark with a little bit of coal and with styrofoam on the bottom.

But the mini phal doesn't seem to like this either. The roots are shrivelled even after watering (they are green but still shrunken). So I thought that the bark was too airy (that the bark pieces were too big). But then I noticed that one root (which hangs almost completely in the air) is rotten with this orange fungus or mold or sth. on it. Also the bark dries out very quickly on the top and stays really wet on the bottom.

Obviously I had chosen the wrong media to pot the mini phal in. So I guess it will be necessary to repot it again and cut off the rotten root. But I have really no idea what potting media should I use. My big phals are doing well in these bark pieces but it's obviosly not the right media for the mini phals. I will really appreciate any ideas because I don't think my phal will survive like this.

Many thanks.