to the OB!
Yes, do get that Phal. out of the soil, wash the roots off very well and cut oft the yucky roots. The pot size is dictated by the size of the root mass you have left. The roots should just fit into the pot, without squashing them. Cut off ALL spikes, close to the leaves. You can leave your plant bare root for a couple of days, while you hunt for a pot with good drainage and the coarse Orchid Bark Mix.
I have to run now, but will be back tomorrow. I'm guessing that our experts will have already given you sound advice, by the time I get back.