Phal problem is S/H, please help!

[empiref]

Hello all,

I acquired a couple of new orchids 16 days ago, I cut the flowers off and placed them in water and re-potted them into S/H.
One particular Phal, lost the bottom leaves, they shriveled and today, I removed the Phal to check on the roots and found out that they are mushy and rotten. I already know that roots rot when they introduced into a new medium.

I cut off all the rotten roots, and noticed that there's 2 new roots that are working their way out of the rhizome. I applied cinnamon powder on the base of the removed leaves, and generously sprayed some Hydrogen Peroxide 10% on the rhizome after the removal of the rotten roots.

Should I put the Phal back into the S/H medium in the old pot? (of course after cleaning the medium out), or should I put into a smaller pot to get a couple of new roots first and then move it to the big pot. To hold it in place in the hydroton medium, I will stake it to keep it steady.
Or should I place it into a deep water culture and keep it there?

Here are the pics.

Thank you for your time and help.