There was rust present in a lot of places between the basket and the tub. It cleaned up well with a wire wheel, brush, sand paper, scrapers, POR15 Cleaner Degreaser, and POR15 Metal Prep/Etcher. I put the basket in a kiddie pool on the lawn, but had to do the outer tub prep in place in the house, taping over the drain holes to contain the liquids until the process was finished. It was a lot of work but with patience there was no turning back now.
I bought a small POR15 rust treatment kit (pictured) for around $45 CAD; Canadian Tire carries some POR15 products too, for a little cheaper. I needed a little more POR15 paint than what came in the kit, so I bought a '6 Pack' of 4oz cans (pictured). It's best to open just one small can at a time as needed because POR15 doesn't keep that well after opening.
I cleaned and etched the entire surface of the tubs. I put one coat of POR15 on the areas that had been rusting, then went back and put another coat over everything. The underside of the top of the washer received POR15, and anywhere else where rust had begun to take hold.
I figured POR15 was the best suited rust treatment system to use under these circumstances. It uses moisture to cure; doesn't require a topcoat unless it is subject to direct UV light of the sun. Get as much of the rust off as you can; POR stands for Paint Over Rust so stable rust is ok. POR15 has pretty strong fumes. It is as tough as nails.
A pinhole did appear while scraping rust in the bottom of the outer tub. I used JB Weld to fill it before the POR15 was applied.
I replaced the original corroded basket mounting bolts with stainless steel bolts and washers (HomeDepot). The lock tab on the plastic hub cover was sprung and no longer hooking on; I used a hairdrier to soften it while pulling it back into shape.
I used a 4lb hammer to drive a solid rubber mallet down, to get the agitator fully seated; a little Vaseline helped on the splines.
I got the motor drive pulley to align better with the pump pulley (where that sectional rubber flex coupling is) by adding a couple of steel washers to one of the three mounting points (I think there are before and after pictures).
The hot water is slow filling into the tub. I need to see if there is a clogged screen in the fill valve, or if it's the house plumbing.
That's all I can think of.
The washer works like a dang! I am looking forward to it's 60th birthday!