What am I doing wrong with this Phal?

[cythaenopsis]

That good you changed the potting mix. Most of the time, sellers will overly pack the orchid with moss (they do this to reduce the frequency of watering and to keep them firmly in the pot for ease of moving them).

Bark mix is better, because it provides more aeration for the roots, but it's also a challenge because you have to water more frequently. That's fine for when roots are healthy, but if they are rotted then you have to be careful not to over water. The roots with velamen on them do need to dry out between watering, but those without the velamen will dry out more quickly. I feel that moss makes root recuperation a little easier, but you can still use bark.

Unless the roots are infected with a fungus, the rotted velamen in of itself won't be a problem. But it's generally a good idea to remove all of the rotted velamen just to help avoid attracting fungus. A lot of this depends upon your environment. This exposes the root cortex, which means the root doesn't retain moisture as well. But they still help feed the plant.

There are several strategies that people use to help an orchid grow new roots. Some go so far as to suspend the naked plant over water (e.g. a plastic container), so that it gets plenty of moisture and aeration. But some also find that putting the plant in fresh moss and being prudent not to over water will work fine as well. There's also rooting hormone available to help encourage new root growth. I've not yet used it but from what I've read many people swear by it.