Thanks everyone for the opinions. I didn't realize there were different types of keiki's. I think Ray's first suspicion about the basal keiki is correct. I took some pictures below.
Here is the mother plant and the new spike. I think there's another keiki growing from one of the nodes:
As you can see the roots look good and nothing smells off. When I separated them, I trimmed back all the non-productive and dead roots.
Here you can see some of the yellowing of the leaves:
I haven't attempted to look into the media to check the roots too deeply since it was separated from the basal growth fairly recently and I had the opportunity to check things out back then. I figured it needed time to just settle back into the pot.
I also don't have the removed plant anymore. I live in an apartment and don't have a lot of growing space that the cats can't get into so I gave it to a friend at work, who also loves orchids. I just feel bad. This particular plant has always been such a solid and strong grower. I don't want to end up killing it from loving it too much.