Rusty Blades should not be used to shave ice for human consumption, they should be replaced with new blades from the manufacturer or distributor of your machine.
When sharpening blades only the edge of the blade is sharpened. If the edge has a buildup of misc. material, rust, chips, the blade edge will be pitted and unable to be sharpened properly.
Lightly rusted blades can sometimes be cleaned with fine steel wool.
Wipe all blades down with a clean cloth and coat the blade with some mineral oil so it stays sharp and rust free. Good advice from William of Shave Ice Supplies