Anyway, on the health of the Phal it's self, I would say it does look very limp and dehydrated.
Dehydration occurs when the plant cannot get enough water BUT that does NOT mean you should water it more. Dehydration is as likely (or actually more likely in climates like the UK) to be caused by over watering which leads to root rot, than by underwatering.
I will come back to my earlier question which you may have missed while concentrating on the mushy spike... has it been repotted since you got it. If not then it is WAY overdue to be repotted and you may find that the roots have deteriorated as a result.
You want to get some high quality bark mix. I would NOT recomend the stuff from the garden center or other local store (unless you happen to be close to a specialist orchid nursary). I have found that this can be already decayed before you get it (due to the low turn-over at regular stores) and has actually been the
cause of root loss in some of my Phals. I use
www.orchidaccesories.com which sells good high quality products. In my experience it is worth the postage cost to get the good quality stuff.
If you have had this a long time it is unlikely you have root rot due to overwatering, but it is possible. I would perhaps be inclined to take a look at the roots, ease the media/roots out the pot then as you have not yet got replacement medium repot in the existing stuff (that is unless you notice it smells in which case you may be better off leaving it bare root for a while.
If the roots are firm then they are good. If they are hollow/mushy they are bad. Just because you can see good roots on the outside of the pot, they
may be the only ones, so you want to check inside.
You want to remove the bad ones and just leave the good ones. If that means there are not many left then let us know and we can advise what to do next. It might help to take pics of what the roots are like so we can give the best advice.