Ouch.

My opinion? Find a different bike in better condition to replace that bike with. You'll probably be ahead in the game when done, unless that specific bike has some very special sentimental or historical value to you.

From my vantage point I can only see sadness and regret if you have it shipped home and begin to work on the bike, might even lead to problems with your feelings towards your friend. I'm thinking it's best to let it go, keep your good memories of it, keep your friendship, and find a replacement bike to ride.

I recently found a used Schwinn LeTour and have found it to be a nice sentimental replacement for a bike I had years ago and swapped off to a friend. Mine was a 10 speed, the replacment is a 12 speed, mine was friction downtube shifting, the replacement is indexed downtube shifting and I think it has a friction option, mine had 27" wheels, the replacement has 700c wheels, mine was red, the replacement is a blue/black fade. In the end I'm happy, the replacement reminds me of the days of old (if you can call the 1970's old), and the late 1980's updates to the replacement bike makes for a very nice and enjoyable ride.

My suggestion: delete the rusty pictures from your computer and save the nice memories of how the bike used to be. Others might have differing opinions and suggestions.

Hope this helps a little.