Since you have a little new root growing, you might want to try s/h. There is no guarantee it'll save your plant, but I transferred my struggling orchids into it about 2 months ago, and I have new growth everywhere. Since your Phal. used to like peat-based moss (a lot of moisture around the roots), it might really bounce back with s/h.
nmf, after reading this a couple of times I am wondering perhaps if the Phal became unhappy because of lact of fertilizer. It just sounds like maybe your plant medium became void of all nutrients. You have been give great advice.
I would move it, if it were me into a bark medium. Give it nutrients. I use cloches during the cooler months for Phals and terrestials. They love the humidity.
The other thing would be to keep it from you new Phal to be on the safe side. Since you haven't identified what technically went wrong.
I followed some of the advice I received here. I put the orchid and its pot into a large glass fish bowl filled with damp sphagnum moss and moved it to a sunnier spot. I water when it gets dry and usually mist the inside of the glass bowl daily. The remaining leaf got worse for a while but it's kind of leveled off. And about a week ago, I noticed a new little leaf has come up and it's been growing steadily.
So excited that this plant may finally be on its way back to being the beautiful plant it once was.
Phalgal, yes that would help a lot. More so than rocks in a saucer of water although that helps maintain a great area. I like the bagged plant for higher humidity method. It works very well.