Buy Loctite Naval Jelly, K1 Kerosene (about 5$ worth will fit in a milk bottle easily, this is a penetrant that stabilizes steel after treatments. It also removes old grime and any contaminants such as sap, gunk, etc.), 600grit wet/dry sandpaper ~~OR, EVEN BETTER~~ A metal finish pad (this works off old rust and buffs the steel), 2000grit wet/dry automotive paper (2000grit wet/dry paper leaves a mirror/satin finish on metal. You can see your reflection in it). All of these (But K1 Kerosene) you can find at a local hardware store. You can purchase K1 Kerosene at a gas station.
For this knife I would just suggest a Metal Finishing Pad (6$), 2000grit wet/dry automotive paper (7$), Use a small rectangular piece of wood to use as a sanding block as to keep the lines of the knife when you refinish it. To get that metal on the scabbard completely clean again, you will need to apply naval jelly: Apply the naval jelly liberally to the scabbard's metal. Have a container filled with kerosene enough to submerse the metal in ready and waiting. Wait 5-8 minutes for the naval jelly to penetrate the rust/oxidation. Then buff away at the metal with Steel Wool or a piece of metal finish pad. When done buffing, rinse the scabbard with warm soapy water, dry with paper towel, and submerse in K1 Kerosene for a minute and dry. You need to repeat this a few times to get the oxidation off. You can then finish the scabbard with either paper or bead blast the metal with the plastic properly wrapped up with duct tape.
For a quick fix for the metal on the scabbard, go to a gun specialties store and buy a light brass bristle gun brush. The brass isn't hard enough to damage the finish on the steel, but heavy enough to remove/buff away rust/oxidation from the metal surface as well as exfoliate pits/pitting. This is second best to bead blasting or refinishing the metal.
To fix old leather, you need a wax product called Atsko Sno-Seal. It is a beeswax product, and is good for all leather. It will absorb into the pores of the leather, both plumping it up as well as waterproofing the leather. It will slightly darken the leather, but it is well worth treating the leather at least once. You can also use this product to plump up and restore old leather washers on hidden tang knives such as the Kabar 1217, or Cattaraugus 225Q (etc.). It works to waterproof the tang. This product costs 8$ plus shipping off of their website:
http://www.atsko.com/sno-seal-wax-8-oz-jar/
To apply, smear the product liberally and as evenly onto the leather as you can with a clean sock or lint free rag. Use a blow drier on medium-high heat and heat the product until it liquefies to a workable state. Spread the product evenly and work it into the leather. Then, allow the product to solidify for fifteen-twenty seconds and wipe/buff away excess with your sock or rag. You may need two or three applications for the desired result. This product will slightly darken the leather you use it on. It is a great product and I have used it for some time now.
Hope this helps. This is all you need to know to fix that knife up, Chemist. :thumbup:
If you ever want someone to clean that up for you, I am willing. I can show you some examples of my work if you would like. Please let me know if you have any questions. I can walk you through the restoration step by step if you would like. I love restoring old knives. Either way, all the best to you.