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Looking back on this 40 or so years later, what is your best guess/ theory on the rust?
Moisture a contributor but, watch seals were all good.
Is it a WatchCo Seamaster 300?
Moisture a contributor but, watch seals were all good.
So the watch was pressure tested regularly? That's the relevant issue, not just whether the seals were apparently "good". Many people can sadly testify that a watch is water-tight ... until it isn't. That's by far the most likely scenario.