I'm not expert but I believe miltonia are moisture lovers and they need to be in a smaller medium compared to other oncdium genera. I actually bought mine growing in a peat/coir based medium. Were the dead roots mushy or dry? Mushy roots are a sign of overwatering generally. 3 times a week is more than I would water so I suspect overwatering is the issue. I think sphag will work fine with a miltonia. High humidity is required for these orchids because of their thinner leaves. I think leaves are supposed to fall off eventually on these, but I'm not sure.