I normally flush out the engine good with something like denatured alcohol followed up with WD-40 (WD-40 helps to remove residual moisture besides oiling stuff). Then I rotate the crank feeling for roughness or a slight rolling noise (like dry ball bearings rolling on the table noise), if you have a bearing problem, it is time to replace them.
Then if I plan on storing the engine, I use a better long lasting oil like automatic transmission fliud or something to oil the engine with.
Old castor oil tends to get dark after a long time and turn a brownish red like color, one should not confuse it with rust though.
It is common to see some rust spots on the crankshaft, that isn't a problem.  I sorta like to find a old engine, when I buy one, stuck or frozen with castor oil in it, as the castor oil tends to really protect the insides well. it isn't difficult to clean up the engine and have it running again.