Actually, creating that fine rust intentionally is the first step in rust bluing. Disassemble the gun completely. Degrease it with a couple of day's soak in some virgin mineral spirits. Flow a bit of denatured alcohol over it to rid it of trace oil from what was dissolved into the mineral spirits. Then boil it in distilled water for about 15 minutes. That boiling will convert most of the rust to black magnetite. Most of it won't be well-adhered, but where it is adhered it will blend well into the bluing.
After removing the gun from the boil, use a clean towel or something to hold it while you shake it off. Being hot, it will dry very quickly, leaving yet another micro-thin layer of blue oxide.
Finally, hose the thing down with WD-40. Yeah, I know. But the WD stands for "Water Displacing", which it does well despite that tacky film it leaves when it dries. After the WD-40 has coated all the boiled metal, let it penetrate for a bit then rub the gun down with a rag. You'll see some black stuff come off on it, which is the part of the conversion that isn't well-adhered to the steel. If you want to get rid of the WD-40, just do the mineral spirit soak again, and apply your regular gun oil afterward or polish it with some Iosso Gunbrite to get the last of the loose particles out, then oil it.
