It's a root. This is fairly common for phals that are recovering after losing a lot of roots. A good sign! Edited to add a photo of a phal I rescued that's doing the same thing. The two bottom leaves are in really rough shape, and probably should have fallen off when the others did (I found this in a coworker's trash, totally dehydrated), but shockingly, they never died. This guy finally has a root system that can support the plant again. After three less-than-stellar leaves, it has sprouted a perfect, healthy, normal-sized leaf. Hopefully a spike isn't too far behind. This post was edited by Danielle317 on Thu, Jun 12, 14 at 15:18

I agree... it's a great opportunity to gather more knowledge about your bulbs! Generally speaking, rot can usually be taken care of by peeling the outer layers away, like an onion, until healthy layers are visible. Most times, the rot only sits at the very outer layers, which were exposed to constant moisture or fungus at some point. At other times, it may be necessary to do a bit of surgery, slicing the rotten portion of the bulb carefully away with a clean, sharp knife. Unless it's a very advanced case, rot doesn't usually reach the inner core of a bulb so fast. In any case, it's a good idea to keep an anti-fungal powder on hand, such as Captan, made by Bonide. I use it on almost all new bulbs as a preventative, and on bulbs that have shown some rot, once that rot is removed. In my particular environment, cuttage would be an iffy project... unless the seasons were right. But in a warm environment, and with the proper knowledge, a bulb can be cut and multiplied as long as each piece has part of the basal plate attached. It's amazing how hard these bulbs try to survive and give offspring when threatened. I think you'll be fine... and I think this is a great opportunity to learn something new!

Well, your way you can let them grow on for quite awhile in the pots, most of the other methods require repotting and probably rather quickly after they root or they will not get much nutrients. I'm just guessing, but adding a little peat probably helps. My 33 don't seem to be doing much of anything, but I lost my last ones. The latest have been in 27 days, 26 days, and 21 days now respectively. Some lost all their leaves already, some are still green and on, some are turning yellow, one under a mason jar in the ground is still green (ran out of pop bottles), the rest like that the leaves turned brown and fell off (cooked) but some stems still green. I'm just thinking what to do next if these don't take. The ones that look the best are in cups like Michelle's only buried in the ground, covered with 2 liter pop bottles in 1/2 peat and 1/2 pearlite, recommended by George Mander since most of us can't get what he uses easily anyway. The first two of the latest sets, I mixed up the wrong stuff, but they don't look as if all is lost yet anyway. My first cuttings I tried pure Canadian gold potting soil but didn't cover them, a few started putting out new leaves after longer than 21 days, but then I overwatered them (I think) and the heat did them in. I'm repeating this ad nauseum. The waiting is kind of tedious, each day I look to see if there is any sign of new leaves. Three are in the north window in ziplock bags, one lost all its leaves but stem still green, one lost part of its leaves, top leaves just one yellow spot, and one lost all of its leaves but the top ones which are still green, no sign of new growth or roots on any inside or out and I am not about to tug on any of them.

People worked with wood for thousands of years before the advent of electricity. A quick Google search turned up a video that uses a circular saw to save some time. No reason you couldn't use a hand saw instead. There's a You Tube video using a hand saw here.