So I spent an afternoon working on the Madison, taking all the parts off and getting down to a bare frameset.  In a case like this where rust is rampant, the biggest concern is seized parts, with bottom brackets, stems, and seatposts being the primary targets.

As a side note, I recommend anyone purchasing a used bicycle to make sure that the seatpost and stem (if quill style) move freely before purchasing.

To my amazement, the only trouble I had was getting the completely seized rear wheel out of the dropout and my inability to remove the driveside pedal from the crank arm.

Now that the frame was bare, I could really get a look at the rust damage.

It was extensive, tons of pitting but nothing that seemed to go so deep as to render the frame unusable.