My recent D1 purchase was not dissimilar. perhaps not quite as bad, but certainly plenty of rust in the water - I put it down to well beyond end of life antifreeze, and spent some time flushing and back flushing the rad and the engine itself. Ran it up to temp with just plain water in, and dumped it, then let it cool and did this a few times until it was clean water coming out.
This seems to have worked - its done a couple of thousand miles since, including some motorway, and there have been no problems yet.....
Best of luck with it!