http://www.gundersonmilitaria.com/knives.html Here's a place to see what your blade may be worth. Go down until you find the M 1917 LF&C trench knife and remember you don't have a scabbard. There's one that would be in the shape of yours except for the missing scabbard.

Here's some threads on rust removal, so I don't have to re-hash this with the same people...if it doesn't come through, just search for rust removal in the advanced search engine at the top right of the page.
To do or not to do (removing rust)? [Archive] - Military Surplus Collectors Forums Cleaning rust off magazines To remove or not to remove rust on a luger