I would take the rust off using molasses, mix molasses and water 50/50, stick the blade in and let it sit for 12+hours. I think Dave posted this a while back, I did it once and it worked well, removing the rust without scuffing the blade or ruining the character of the old blade.
Cool knife, i like the crazy looking bolster.
What are your plans for the refurb? are you use wanting to clean it up, but keep all the original character and materials or are you wanting to make it look like new?
Considering the knife isn't mine, I'm probably going to just clean it up and put a good edge on it. I'd like to take it apart and put new scales on it, but I think it would lose it's integrity as a family heirloom. As the scales are a tad loose, I may have to re-peen the pins a little in order to make the knife usable again. If I had bought it off e-bay or at a swap meet or something, I wouldn't be at all hesitant about new scales, pins, etc., but as it belongs to someone else, and has their family history attached, a good clean up and sharpening is all it needs. I like the molasses and water idea.