Oh no... this happened to a grocery store mini-phal I bought a couple of months ago. I always get them out of their yucky moss as soon as I get them home, and then I put them in clean bark, and they usually adjust with no problems. I have rescued more orchids than I can count by doing this and just being patient. But then, randomly, my mini just starting turning yellow from the inside of the leaves outward, which no orchid has ever done before for me.
I was really, REALLY disappointed because I absolutely loved this tiny little orchid. Usually I'm not so attached to grocery-store clearance-aisle rescues, but this one I had paid full price for because it was just such a gorgeous shade of orange and had such tiny flowers.
Anyway, I did everything I could think of to save the orchid, and it died anyway... the leaves turned yellow from the bottom up, and from inside outward, until finally all of them had fallen off, the crown shriveled, and and the orchid was clearly dead.
I wasn't able to get any real explanation for what had happened. Tucker suggested that perhaps the orchid had gone into shock because I may have forgotten to warm the water I used to water it, and orchids can go into shock if watered with really cold water. I thought I had remembered to warm up the water before watering, but I could have accidentally forgotten once if I was in a hurry.
At any rate, this doesn't look good. I really hope someone can give you some answers, because it might also explain what happened to mine.
I'm wondering if it could be a "grocery store 'mini'" issue, since you said that yours had tiny flowers, and mine was a mini that didn't do well. I've also had other "minis" that I've bought or received as gifts from grocery stores in the past, and none of them have done all that well, now that I think about it. They seem to be weaker plants than their full-size counterparts.
Perhaps it has something to do with the breeding they do of the minis?
I hope someone chimes in who can help you rescue your plant!