What I do is paint the model with a wash of rust colored paint (I use the water-based stuff), like you, and when that is dry, I put some rubber cement over the area that I want rusted. after I apply the top coat and that is dry, I take a pencil eraser and us it to remove the top coat of paint, exposing the rust color. This technique is very useful for showing areas of a wood building that the paint has come off, exposing the wood. It is also useful for when you want a building (Like a gravel company [which I happen to be working on as we speak, I'm just waiting for the glue to dry before I continue painting]) where there have been multiple coats of paint in different colors. I paint one color, put on the cement, paint another color, and so on, until the desired effect is achieved. The model, Walther's Glacier Gravel Company kitbashed together with a porotion of the New River Mine,is in the process of being repainted by a new owner. I plan on using a pair of narrow gauge 0-4-0s and 4 cars each to take gravel from the pit, which I am modeling (because I can, and it seldom is), to the crusher building up a 5% grade
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with a switch-back. I will use "live loads", which are gravel screenings from a stone pit that my dad used to drive for. I have to figure out how to load the cars with out using my hand, but I have figured out how to dump them automatically. They will be in the crusher building, so no one will see the wire ramp that is going to catch the sides of the cars. If you need a visual of what I am talking about, go to the following address:
www.carendt.com/microplans/index.html