The first thing you will want to do is make sure the roots are healthy. Pull the plant out of the pot and inspect the roots; healthy roots are usually white or greenish; any that are dark brown or mushy are rotted.

While you are at it, determine what it is potted in. Bark? Moss? You can take a picture and post it if you arent sure.

The roots and what they are in I also think the pot is too small but im not sure

Another look

Some of those roots are still healthy, so thats good. But some of them are rotted, and the mix is far too wet. You want to get rid of all that moss- gently remove it from the roots. Then use scissors or a knife to cut the rotted roots back to healthy tissue. Disinfect the scissors/knife in between every cut. I believe you use water and bleach, about 1 part bleach to 9 parts water? Just dip it in and dry it off. Then you will want to repot it in orchid potting mix, something that is all or mostly bark.

Soak the bark for a few hours beforehand.

You dont need a big pot for an orchid. Use a pot just big enough for the roots.

Go here:
http://www.orchidboard.com/community/ and sign up. Excellent orchid forum. They will tell you anything you need to know.