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Donat
Maybe the rust has increased the diameter of the steerer enough to stop the headset ring from sliding back up it. One thing that really eats rust is lemon juice. Fresh from a lemon is best.
So I'd get a cloth and try to remove what rust you can with normal degreaser/cleaner. You can also rub with an old knife, but be careful you don't remove steel. Then wipe it clean/dry, squeeze a lemon onto the steerer, let it sit for a minute. Squeeze another lemon over some wire wool and scrub the very lowest visible section of steerer. Tickle surface with old knife again to see what comes off, final scrub with wire wool, wipe clean, apply GT85 or WD40, attempt wooden block again.