I got my frame powdercoated a couple months ago at Midland Metal Finishing in Northeast. Very decent people over there. I got mine coated for 50 bucks. This was however because, I was willing to get my frame coated with the colors they were using on their 'big' jobs at the time. This happened to be matte black, which was fine with me. It turned out really well, and they were very nice to deal with.

To stop the rust, you, or someone would want to remove the existing rust. If you have someone sandblast, make sure they know that heavy blasting can really put tubing out of whack if done wrong. You may just be able to sand it yourself, and then take it to get powdercoated. Look forward to seeing it done. Cheers!