It is burning somewhere either from an internal leak, which is burning in the cylinder or leaking externally and burning off the manifold. I suggest inserting a dye into the system and having a shop use an ultraviolet light to find the leak.
As far as the rust, it happens from lack of service. You need the system power flushed to get rid of the junk. What ever you do, do not use sealer as it will complicate the diag process.
Roy
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Wednesday, September 21st, 2011 AT 2:08 PM