I watered it with distilled water. However, I'm just thinking it didn't get enough light and I over-watered it. The perfect combination for rot.
When I get my new one, I plan to get a sandier soil, less watering (keeping the soil damp to slightly wet), and give it lots more light. My former Cephalotus was growing in my south facing windowsill, where it only received about two hours of direct sunlight and the rest of the time was shade.
In addition, I think I'll name the new Cephalotus "Audrey 2". The first Cephalotus was named "Audrey Junior"