Final update for now....on the original fork front, I'm starting to think @CliffordK, @dddd and @Velognome may be right. I did some intensive cleaning around the hole and actually no other rust anywhere around there - pitted chrome yes, but no rust or flakes. Some powdered rust and small bit came out of the hole as I shook the forks, but I now suspect at some point in the past something was attached there, pulled out and left a puncture. It doesn't make sense that a rust perforation would occur on the TOP of the tube before the bottom if it was moisture inside that caused the problem. I poked around pretty hard and scratched away at anything that looked even remotely suspect and nothing else showed itself. Anyway, I think I will leave it off the bike for now regardless, but I will take it to be assessed/repaired at some point.

The really positive news is that not only is the replacement fork I already happened to have a match for the geometry, it turns out the threading is the same so I get to keep the original headset. It all went together "like butter" tonight. And it doesn't look too bad. The crown on this new fork may even be chrome under the paint based on some chips - I will be able to tell once I prep it for painting. So the bike will be rideable no matter what!

Next step will be rebuilding wheels - that will be some time so I will be posting under a Paff update thread when I have more work completed.