my advice...as its the trunk lid....go find an 850 in a salvage yard with front end damage (you might get lucky with the colour!) get a good lid..spray if neccessary and fit...

Sounds to me like that lid is a bad one (probably crash damage, or opened into a roof etc) better to start again and little more expensive...

if you are pretty handy and patient, do a google search on por-15 products.

This is a great product for rust treatment, control and priming for painting. I bought a starter kit from IPD for less than $20, and fixed my rust problem im my 740 wagon. It came with cleaning solution, primer and rust proof material that can be painted over and great instructions.

Try it, you can't loose for $20.

The key ist stop the spread of the rust and this product would do it.

--
'92 740, '98 v70 John, Tampa Bay

It's very unusual for any 850 to have rust problems even in areas like yours where road salt is used. It's possible that the car was once in an accident and that inferior, aftermarket body parts were used and that might be hard to prove.
At any rate, get estimates from bodyshops. Local word of mouth is usually the best way to find a good one.