Advice needed on restoring an old Star Diamond combo machine

You have a challenge, but it will be a learning experience and probably successful. First while you might be able to use the silicon carbide wheels (DON'T). When you abuse them they break off (throw off) pieces and once out of balance can literally disintegrate hurling lethal chunks of stone at the operator. When using these wheels its essential to spin them to remove excess water before turning off the machine, and more importantly not stand in front of them when you first turn the machine on. Diamond wheels or expando wheels are cheap enough that only in special cases would I recommend sticking with sic wheels.
That rust will be a challenge. Do you know about Evaporust. I hear its wonderful. Don't fret replacing the blade, I'm hoping that you don't have to replace the shaft. I believe the housing is cast aluminum or at least not steel. Hence it is subject to breakage and hard to repair once broken. As you are freeing bearings etc. be cautious not to hammer or pry on the housing. Evaporust shouldn't harm it. I could tell you why I know breakage can be a problem, but you can guess. I have an older cab machine quite similar but without the saw.

Go slow and clean that rascal up and polish rocks. Oh, you do need more than two wheels eventually but I don't want to scare you now.

This is my star diamond machine aka the beast. I bought a bunch of old equipment from a local lapidary guy. It came with two very worn diamond wheels. The wheels had cup spacers against the wheels which were probably for the original silicon carbide. The process was to use the 80 grit and 220 grit to shape and a lapidary belt sander with a worn 400 grit belt and then finish with tin oxide on the leather pad. Some cabs came out ok and others undercut. I was enjoying the hobby enough to buy a Genie.

I later decided to retrofit the stardiamond with new 8 inch 80 and 220 hard diamond and 280, 600 and 1200 Nova wheels. I would finish the cabs on the Genie. Thew picture doesn't show it but I bashed a hole in the face so I could slide in trays and use geysers instead of overhead drip.

I assume this is the same machine with diamond belts on the left for the other grits. I had the same on my machine and replaced with wheels.

Mine had already had the two silicon wheels replaced with diamond. My polishing pad was on the left. I removed the arbor, removed the pad by loosening the set screw and slid everything of the shaft. I replaced the wheels and added spacers so the bearings stayed where they were.

rockbrain chlorinated oils and solvents are super effective, but should be followed up with a good rust inhibiting oil since chlorine encourages rust, even when it's in a petroleum product. I had a running argument with my chemist boss about the way rubber molds used with neoprene (chlorinated rubber) rusted even after being sprayed with WD40. He said the WD helped, I disagreed. To prove my point I bead blasted some new steel, a piece of HR bar cut in half, sprayed one liberally with WD and nothing on the other, labeled them and put them outside in a place where they would not be rained directly on, only humidity. Forgot to check them till about 90 days, when I found both rusted. The untreated one had an even thin rust layer, the WD coated one was beginning to develop pits.