Ideas on how to deal with this surface rust? at least it looks like surface rust. Which is crazy considering that this car has sat in a climate controlled garage for the past 20 years. Im tempted to tape the car up and spray it back black but im more of a replacement person if I can help it because my paint skills have been known to be a 20 foot'er kind of job. any suggestions?
are you talking about the rust on the hatch glass edge trim? the best way to fix would be to remove it and repaint, but it's a real PITA. you have to remove the entire hatch as the trim goes under the hinge bolts.
an easier option would be to mask off the car and glass, scuff the trim with a red scotch-brite and then repaint.
Wash the car then clay bar as GearheadSS stated, but also use an iron remover. Spray it all over the car and let dwell, don't let dry. You'll know it's working when you see it activating and purple is running down your car. Agitate with a wash mitt for worse areas. Hose off and wash car.
lift the gate, put down newspaper, close gate, now mask off window, spray 'Trim Black' on it.
remove masking paper, enjoy letting your car sit for 20 more years.
That has happened to every 3rd gen hatch I've ever owned (I've owned 3 third gens, and some of them have had multiple hatches, my current '87 TA is about to get it's 3rd). Replacing that trim is a real PIT butt, it is attached to the pannel at the end of the hatch glass and keeps it aligned. I played with trying to get it both aligned perfectly front/rear and up down and spent days trying to get it right, then created myself some bodywork when the studs that went through the glass bent slightly to accommodate that, causing dimples in the deck surface.
Don't mess with it, open the hatch, cover stuff up, sand it, mask it, and paint it with some semigloss rustoleum or some trim paint, and it will be good for 20+ years if you do it well.
