Whoa Crayola, don't panic. You don't want your colors to run.
All is not lost. Is it light surface oxidation, or heavy "eating at the steel" oxidation?
If it is only light surface rust specks: First put away that sandpaper! Why scratch up your blade if it's not necessary. You have a few options. Try a mild rust/lime/calcium remover available in your grocery, and hardware department in the household cleaning and detergent aisle. In Canada, there is a brand called CLR. Put some on a soft rag and buff the blade up.
Another option is Flitz polish. I found sample packs at my local chain retailer for knives for about 99 cents. Check 1stopknifeshop; they may have it. It will remove light oxidation and polish that sucker up good. I used it on my two year old SOG MagnaDot and it made the blade look better than new! If you can't find Flitz, I think Novus polish or even Brasso might work similarly.
If it's heavy oxidation, that is rust eating away at the steel, you should try to neutralize the rust. Go to your hardware, or automobile supply store and get some rust remover. This is different from the CLR stuff (described above) and is much more corrosive and may also stain steels. Therefore, I suggest you dilute it a little and use as directed.
[This message has been edited by Full Tang Clan (edited 09-03-2000).]