2nd Gear Member
Join Date: Sep 2003
Location: Denver, Colorado
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There is a "lining", actually it is more like an impregnation, in the cylinder walls to reduce friction. The "lining" was never designed to inhibit rust and should not be relied upon to do so. I do not know if the block could be remachined to remove the rust, Bravarian Engine Exchange may be able to answer that question (do a google search for them).
On another note I would be furious over my good block being left out in the elements. If the block cannot be fixed to your satisfaction I would demand a new one.
PS. If it is very light surface rust a Scotch-brite pad should remove the rust, if there is roughness or disscoloration the block may need to be honed out.
"It's not because I'm an aggressive driver, it's because I'm an idiot" actual quote from my wife.