I don't have much experience with Cypress Mulch but it does look way too damp and wet for long time use. I'm not sure if that is the picture or if it is literally soaked in there. It may not be the best thing to keep her on. I would recommend newspaper with a giant soaking dish. That is what I use for my greens and they appear to be doing great. As far as the eating it could be she is just a little shy and it may take her a few weeks to get used to her new enviroment. I don't think there is anything to be concerned about but I would change the substrate to prevent scale problems and bacteria breeding. I'm no expert just my experience.

Alex