C&V is a dangerous place. I have seen way to many bicycles for sale, and web sites to watch. I stumbled across a Schwinn Paramount for auction at Goodwill, with 0 bids. What was I to do... bid of course. It went higher than I wanted to go, but I threw in one last bid. As luck would have it I won. I am now the proud owner of the ugliest 1986 Paramount I have ever seen. In time it will get better (I hope).

Is that rust on the chainstay?

The component choices does make me wince! Congrats on the save. It does look like rust will be a first tackle issue.

Yes it is rust. I'm not sure what they were doing, but there are several places where paint was removed. Fortunately it is only surface.