Nobody has said it yet so I will....

When you pulled the plugs and shot WD into the holes... Did you turn over the motor with the plugs OUT or did you put them back in first...?

If you let it sit through the winter with water in a cyl you need to go through the entire engine I think...

The Rusty stuff is the First clue.

There should be NO rust in that motor...

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Let us bow our heads and Murff