Ed, it might be prudent to pull the cutting, try to save at least 2 nodes and cut out the rotted parts, then try to bag it it sphagnum again.
If the cutting dried up, you can try putting it in hot water for 24 hrs to rehydrate it. I read about this in the Gustav Eisen book.
If you're interested in that technique, let me know, I'll send you the instructions.