Did it have the dipstick tube in it? That's the most important part. I've found spider nests in trannies with dipsticks missing. I wouldn't worry much about surface rust on an input shaft. That's hardened steel, pretty tough to corrode really. Freshening it up will probably save you a lot of leaks down the road, plus you'll know exactly how it's built inside. Don't tell me a C4 is difficult to rebuild, they're cakewalk compared to anything else!
$300 ain't too bad considering a rebuilt kit itself is around $100. IMHO, TCI converters are complete garbage. I've been burned twice by TCI products and will never trust their stuff again. It's B&M for me, and I've always been 100% satisfied with their products.
------------------
Capri306, Moderator, The Mustang Works Online
1979 Mercury Capri, 5.0L -- C4 -- 2.73
1987 Mustang LX Notch