Update on this ancient thread:
Finally got the axle rebuilt (with the help of my 15 year old daughter) and both calipers rebuilt. I can see why people just buy reman calipers, since it's a somewhat annoying job to redo the calipers. But, since I had a caliper rebuild kit I purchased exactly 20 years ago, I figured I had better use it.
The pistons in each caliper were not rusty, just scummy and gooey from 35 years of accumulated sludge in the calipers. I used a combination of old and new brake pads as the 'block of wood' in the FSM against which to blow out the pistons - that worked nicely. The FSM recommended greasing the pistons and seals so I used a small pouch of synthetic brake grease on the pistons. Bleeding was a bit more involved, too, when you totally empty a pair of calipers.
The result is brakes that feel more responsive and require less effort. I still have a totally factory (1978 disk/drum) setup, but it feels nice. Since the old pistons were very difficult to blow out, I'm sure they were hanging up in the bore when I applied the brakes.
Colo Springs, CO