I don't think it's as bad as you're making it sound -- emps CAN be submerged for quite a while without incident, and if they don't like a flooded burrow they tend to come to the surface.
As for the coco rotting, I'm not sure what's going on there -- possibly the decay of leftover foodstuffs and tankmates? Because I've sifted through coco fiber that had been sitting in the same tank for over a year, and it just felt like it was breaking down into a nice compost. It didn't stink or anything.
