Hey Grey, well I would like to give it a try myself - as the item apparently is not fit for sale, and I am not willing to pay 3000 Euros for a professional polish (an offer I saw yesterday, and which I am sure is fair for a vintage blade), I really don't have many options. I wrote to half a dozen specialists yesterday (all here in Germany) but so far have not heard back from them. Why can't I remove the rust from the nakago? Because it's part of the patina?
Yes I am quite sure the remaining piece of the nakago is still inside the handle, I don't know where else it would be? I doubt that I could get it out with a magnet, I just tried a neodymium magnet against the remaining piece of the nakago and the attraction wasn't very strong even under these rather good conditions. Unwrapping / unknotting the ito to be able to remove the pommel is not an option either, the leather is SO old, it has hardened to a semblance of plastic.
Which brings me to a basic question - how much restoring is adequate, where do you cross the line to "this isn't the original sword anymore"? At which point would the original maker say "you dishonor my craftsmanship", or would he go, "Eh, that needs to be fixed, do what is necessary"?