Are you sure it's rust in it and not dry film lubricant? GM uses dry film lubricant in the front axle from the factory, and is what gives the front diff fluid the appearance of having green fluid and sludge in it. If it is never changed out, over time it can get pretty nasty. Gm does this so it WON'T rust inside when not used for extended periods of time. They have bulletins out for it, but most still don't read them and automatically assume the fluid is contaminated. That being said it does look like ap iece of metal in the fluid puddle in your pic, you need to open it up and find where it came from. Also need to be very careful installing pinion bearing races in these as the aluminum galls easily. I normally use a race driver set and hammer to drive the races in, but when I did mine I ended up using a press because the races kept turning when driving them in.
