Steve,

      I have the same problem with my 87 Syncro.  It started when I noticed
water spurting up from the right side footwell when I drove through big
puddles.  this sparked me to peel back the unsecure rubber mat which revealed
a bit of rust (not that much).  My main problem was and is that the rubber mat
was not secureing down on the frame allowing water to spurt up from the road
through the little holes .  I tore off the rubber mat with the intention of
removeing the rust -- primer -- paint -- and reseal the rubber mat.  So i did
the same with the other mat (left side) and there was more rust there.  So I
did pretty much what you said you did (or are doing), I sanded down the area
with 50 grade automotive sand pape and then used 400 grade, then I used napa
rust remover/sealent.  It took 24 hours to dry.  Then the primer and then
paint.   It looks good but I haven't put the mats back on because they are the
main cause/problem I believe.  Being that the seals created by there
attachments to the footwell are bad.  So I need to order some new mats.  When
I get the mats I am going to smear silicone all over the bottoms and around
the seal before I put them in the footwells.  Hopefully that will nip the rust
problem in the butt.
Chris Wright
87 Syncro GL