Treatment option for rusted blades
1: scour the surface with sandpaper to remove most of the rust and leave a smooth surface to work with.
2: brush on a chemical rust converter (Rustaid, Rust Converter by Eastwood, etc. available from your local hardware store). The milky white liquid will slowly turn brown.
3: after about 24 hours, flip the blade and paint rust converter on the other side.
4: once the rust converter has done its work (rust should now be hard and black), sharpen the edge
the blade should now be virtually rustproof (converted rust turns black and is almost impervious to rusting) and should function quite well.
I once found a Case brand pocket knife buried in the mud while riding. It had probably been there for months. It was rusted so bad I had to take the entire knife apart to treat the blade because it wouldn't open. After sanding and treating, I used the knife for quite a few years before losing it on a canoe trip.
This can also be used as a sort of poor-man's-powdercoating. If you have a knife/hatchet/ax that is prone to rusting, brush on salt water and let it sit out for 48 hours, then smooth it with steel wool and treat with rust converter. This will prevent future rust.
However, the best way is to clean, dry, and oil your high carbon blades after each use.