A 04/05 is going to be rough as guts for £5000, that's if you can find one. Same rules apply to a 300tdi or a Td5 though as regards to rust and corrosion, forget the oily bits, as those can be dealt with more easily.
Chassis, check by sticking your head in the rear wheel wells and looks at the cross member from the inside, grab on to it, you shouldn't or don't want to find excessive flaky rust or even worse, holes. Check both sides of the rear chassis rails where they join the rear cross members especially on the welds, they love to rust there, follow each chassis rail to the front, middle sections are usually in good order, anywhere the crud and mud can collect will be areas that cause rusting, around the rear spring and shock mount, front section in front of bumpers get a lot of road salt, pull the rubber caps off the end of the front of each chassis leg and have a good look inside. Don't just view the outer chassis rails, look at the state of the inner sides and top where possible too, Crawl underneath with a torch and have a good butchers.
Front outriggers, are situated in a perfect spot behind the front wheels to rot away and Land Rover decided to leave them exposed, again, lay under them and look inside and all around them with a powerful torch for rot and grot rear outriggers need the same inspection, working back (ifs its a wagon or double cab) check the B pillars from underneath, check the box section that runs across the chassis rails in front of the rear wheels for rotted areas, also look for the condition of the steel stiffeners that are attached to the underside of the buck area for rot.
Bulkhead, exterior should have no holes, or rust bubbling under the paint near the two vent flaps or anywhere under the windscreen or around the wing mirrors, the door pillar between the wing and the doors dose not want to have any holes or bubbleage under the paint either ideally, older Defenders have usually had some work done here you will find, repairs if done properly with welded sections are fine, filler is a massive no no for me personally.
Lift the carpets if it has them, down by the pedals, look at the where the floor panels meet the bulkhead for rot, also in the corner by each door, don't want to be seeing any grot there either, same with the passenger side, when your underneath, just behind the front wheels you will see the underside of the bulkhead, have a good probe about from the outside too, also spend some time under the bonnet inspecting the bulkhead there, you'll probably find evidence of some repairs maybe or more general rot.
That's where I start when looking at any Defender, then get on to the oily bits.