Mark, welcome to the forum. It sounds like that Luger will indeed be a fun project. Soaking in oil is always a good idea just to get it apart. For me, after its apart, I would not attack the remaining rust with a wire brush, sandpaper, or even (at this point) with steel wool. Brownells sells a chemical rust stripper called Steel White that dissolves the rust while not harming the base metal. I would go this route. After everything is apart and derusted then you can decide whether to try to refinish or even if the gun is safe to shoot. In any case you have a fine relic from the past. Congrats!
Charlie
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