First, yes you can separate the plants. The pots you put them in should probably be smaller than the pot they're in now. As you're finding out, hibiscus HATE wet feet. The roots should fill up a decent amount of room in the new pots so that they can use the water in the soil - this will help keep the soil from staying wet since the water will be absorbed by the plant and not stay in the soil.

It sounds like the soil they're in now is on the heavy side, so yes, you definately could use some of the orchid mix in your soil. It will help with drainage. I'd still buy a light soil with plenty of vermiculte or perlite. One thing you don't want in your soil is the moisture retention crystals, remember you want the soil to dry out, not hold water.
Yes, it is normal for the leaves to stay for 8 months, then die and fall off, but it does sound like your plants are getting strssed from being wet.
One more thing - the plants will go thru a slump after bring seperated, but don't worry, they'll recover and thank you with lots of gorgeous blooms.
Barb

Thanks for the advice Barb. Thankfully, I haven't killed this one yet. It is still flowering but the latest flowers have turned more yellow than peach. I have been letting it dry out between watering. Right now they are in a 4" plastic pot. Plastic pots keep in the moisture and clay pots breath, so would the clay pots be preferable? Would you recommend adding slow release fertilizer to the mix? Marg