Bee,

I have a laminated S-1. The lamination is not some coating on the outside that can be removed. Once it is cleaned up again and if you look closely at the edge you will see that it is a three layer steel. The edge is the center layer and then there are layers sandwiched on both sides of that. So you have a super hard, but brittle, center with softer, but much stronger, layers on the outside.

If my S-1 looked like yours this is what I would do:
I would scrub it really well with a green pad. Then I would take a piece of 400 grit emery cloth and put it on a flat surface. I would rub the sides of the blade on it until I got all the rust off I could. Then I would sharpen the edge and call it good. Nothing like a knife with some character!