I used the sphag. from HD and Lowes(mostly Lowes) and had no problems with it... I repotted in a peat mix(Fafard 3B) due to the economics of buying sphag and having to repot 150 phals!

I find the Fafard at my local garden and farm store. I amend it like I did the sphag...by adding either large charcoal or broken bits of styro peanuts. I also add side holes in my plastic pots with hubbys soldering iron(do this outside as it is very toxic to inhale). I figure the extra air is what orchids love. My phals went wild this past year....