The old pseudobulbs will not necessary plump up. In the natural scheme of things, they tend to lose roots, and provide reserves while the new growth is starting (with new roots) I do see new growths, so that's great. In fact, with new growth (which also gives new roots), this would be a good time to repot into a medium that fits your watering style. I suggest small bark. As ES noted, these do like to be on the damp side. So fresh small bark will give good air spaces and also hold moisture. When you water, water thoroughly. You can put them under the tap, and let the water flow through the pot. This flushes out accumulated salts and other crud and also pulls air into the root zone. Then lift the pot and feel the weight when it is freshly watered. In a couple of days, lift it again... if it feels lighter, water again the same way. If the water flows through the pot and the medium is fresh, the roots will get the humid air that they crave.
These very likely don't need distilled water, unless your water quality is really terrible. However, if you have a water softener, disregard the "under the faucet" advice... softened water contains salt, which is really bad for all plants including orchids... if that's what you have, take it outside and use water that hasn't gone through the system. Orchids will tolerate quite a bit of calcium in the water, but sodium (like in softened water) can be deadly to them.
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