Hey Vandy,
Ditto on the bedliner....as long as you are storing it inside and properly maintaining your chains etc, your frame WILL NOT RUST. Trust me, I am in the salt marsh every weekend and have no rust inside the tub.
Here is the order I would go in for a budget rebuild.
1) Blast/clean the frame and make sure it is structurally sound.
2) Inspect axles and sprockets, replace all bearings and chain. Buffalo Bearing would be my first choice for bearings.
3) Re-seal T-20. The kit is about 40 bucks from Recreatives, this will also give you a chance to look inside the T-20. There is an EXCELLENT rebuild article on this site.
4) As far as motor, 20HP would be minimum in my book. Motors can be had in many different ways...if you are looking to buy a new one. Tulsa Engine Warehouse is hard to beat. No tax and free shipping. I bought my Honda 20HP there for about 1100.
Keep us posted on your rebuild!
Hammers should have warning labels.