Wrenchbender is right, a little rust doesn't hurt the ring and pinion gears. You'd want to clean it off with a rotary brass wire brush before reassembling so you can get your backlash adjusted right, though.
Patrick's one piece bronze bushing has the oil seal pressed into one end and is turned to the correct diameters on both ends to replace the original two bearings. It is a good setup and easy to install.
