I think the water gets in through the bolt holes and doesn't drain very
effectively. Maybe the drain hole is located where dirt gets thrown into it.

I believe if it were mine I would, as a bare minimum, do whatever I could to
clean the interior of the section well, then slosh some good rust resistant
paint in there (maybe POR-15?). I kind of wonder if some vent holes into the
engine compartment might not be a good idea, maybe one near the front and one
near the back. I think I remember seeing a rubber grommet somewhere along
there. Also some sealant around the fender attaching bolts would
probably be good. On Li'l Red, the 67 122 I had in Panama, I ended up putting
longer bolts all the way through the box section because the top was rusted
badly.
--
George Downs, Bartlesville, Oklahoma, Central US