v-spec is a great mill and should be taken care of! To hear that the crankshaft has rust on it is rough. If you are a club racer and handy, I would recomend cleaning up the crankshaft, inspecting the P/S and replacing the rear bearing. The rear is just over 20 bucks for a TKO ceramic and you CAN get rid of the rust on the crankshaft with a little TLC. Make sure you check your conrod for play and if there is any between the bottom and the crank pin, replace it, its only 30 bucks. No need to buy new if you can spend a few hrs and fix this one.
When you're checking the P/S make sure there are no scratches or gouges in the sleeve or piston and make sure there is a decent amount of pinch with the glow plug in. If there is no compression I would recommend the same as the above post, however if there is its worth saving!!!
Good luck, let us know how it goes