I think a refund of $25 would be appropriate for the corrosion (ask for $50). Take the stand apart and clean and lube it and use it. Shipping this back to the seller would be a total hassle (just thinking personally here). I refunded a buyer $100 on a $600 frame because of unnoticed paint chips on my part.
And yes, all the ribbing you're getting for what you paid for shipping is unnecessary.
Scott
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'84 Trek 850--spinbackle-built, '85 Trek 670 Campy Nuovo Record--project, '87 Trek 560 SS/Fixed--project, '87 Specialized Stumpjumper Comp w/ Deore XT--Specialized-built, '87 Rossin Record, '03 LeMond Wayzata--commuter,
'?? TST Mtn Bike frame--project, '07 Tsunami Tandem--home-built