Go bare root until you can get media you prefer. If you can't grow in sphag moss, you won't be able to grow in the palm/succulent media (its the mulch part that's worrisome). Its about balancing moisture and air. It's very easy to suffocate the roots in either.
If the roots are mushy, trim them with sterile blades. Yellow and some dark colored roots might be just discoloration, hard to tell from here. Let the roots dry. Depending on your humidity, dip the roots (and roots only) in tepid water every one to three days. Hang them in a dry vase or jar if your environment is arid.
In the meanwhile, if you are not very familiar with orchids, read
The Phal abuse ends here thread.