Hi Sheridan
I would gently, but thoroughly remove all decaying material including the rotting sarong visible around the new pseudobulbs.
I have been growing in water culture for 6 years and tried well over a hundred orchids. With a few exceptions, I still find it hard to predict which orchid will adapt to water culture. I have had no experience with Laelia so I am interested to find out how it will adapt for you.
I attribute much of the successful growing of orchids long-term in water culture to promptly cleaning up dead and sick plant material and to changing the solution at least once a week, but more often when I have time. I remove all decaying roots and stuff initially, and as soon as I see them developing, later. I aim to leave only healthy roots in the solution. I treat for infection vigorously as long as I see signs of it, usually with drugstore hydrogen peroxide 3% or physan; and if rot has penetrated deeply, with Gentian violet !%.
I aim to use a nutrient solution of approximately 120ppm Nitrogen which would be about 1/2 tsp/gallon of a commonly available fertilizer labeled 20 for Nitrogen. Until the plant has enough roots I also add growth regulator, like KLN, 2-3 drops/gall and soak with 1/2 tsp/gallon before I transplant. I am not sure this is important with all plants.
I hope this helps. Here are a few links to photos of healthy roots. There are many examples of plants I grew successfully in water culture for 2-5 years in that album in my gallery.