Rusty Duck I find at WalMart, the Kroil I get from a local bearing/industrial supply house. That Kroil is some good stuff, I sprayed a dob on a gun barrel right next to a scope base, the dang stuff flowed from on the barrel up into and under the base, you could see it moving, up hill at that. With the Kroil I've been wiping down my guns, apply it around the breech where you get all that fouling, After shooting the fouling just wipes of, it's almost like having teflon coating. Might be good to spary on your scopes to protect against gunk there too.

might eat its way through the scope's seals, Gary.

I'd keep the pistol, but I'd let the seller know I wasn't happy with the description. Might ask for a partial refund to get the damage repaired and see what happens.
As for the rust, it may be from blueing salts retained in the metal (silver solder???) used to attach the sight blade to the barrel. I'd ask a gunsmith's opinion. If it is from blueing salts they have to be neutralized or it will continue.
If a gunsmith thinks that is a possibility I'd contact the manufacturer.

they do not call it the oil that creeps for nothing. I used at work for years-it will penetrate through seals.

It really doesn't look all that bad to me. We do take a chance buying a weapon unseen but I have never been disappointed in any of my purchases. Like Cayaud I do ask for pics and detailed questions. But I think you did OK with your purchase. I little touch up and you are good to go.

I agree with wabi, I would let the seller know that I was disappointed with the purchase of the gun. However, live by the motto, "There is no such thing as a dumb question". I have pushed the limits many times, but just assume I know nothing about the product, and please entertain my questions. That's a lot of money (at least for me) to spend and not be satisfied.

Gents:

I do intend to keep the gun.Thanks to all of you for so generously sharing your knowledge, I feel pretty confident that I can easily remove the rust.

As others have mentioned, it is a good looking gun. And since Ruger has stopped making them, they are getting harder to find in this condition.

~Robert