Personally I'd go for a fine wire wheel to clean it up. All through school I spent pretty well all of my free time volunteering in the shops at a local museum, I spent more time in the machine shop restoring tools and equipment than in the blacksmith shop.
In general I'd avoid grinding, and definitely avoid anything to do with heat treating. It's a matter of restoring an item, vs making a replacement.
I'd go over it with a fine wire wheel to see what you have to work with as a start. If there are some pits and such I'd leave them. Re parkerize, and replace the leather handle. If you're going for an actual restoration, removing metal should be avoided at all cost.
As for the wire wheel vs electrolysis or evaporust, I've never cared for those options. They leave a look to the metal that needs to be polished off if you want it to really look right. It takes no more time and effort to wire wheel it from the beginning, than soak it for hours before having to wire wheel it anyways