Most likely the bearings are shot. A full disassembly should be performed, the bearings replaced, and the crankshaft cleaned up. The steel parts in the engine are the ones that will rust. Even if you use lots of WD-40 to free up the engine, the bearings will still have rust on them and be rough from the pitting.

Check the piston ring, too. It may also be rather rusty. If it's rusted, it will likely stick in the ring groove when you attempt to run the engine, and may not allow for a good compression seal.

Also, if you run a rusty engine, loose rust will be distributed throughout and rust is a dandy abrasive compound.