first you should not stick magnets to the outside of the oil pan, they trap moisture between the magnet and the pan surface , this can and offen does cause rusting like you found out, second,those oil pan plug magnets are a #$% joke!
USE MAGNETS THAT WORK!!
http://www.wondermagnets.com/cgi-bin/edatcat/WMSstore.pl?user_action=detail&catalogno=0001
everyone , reading this should buy 4 of those #1 magnets and install them in their engines oil pan,run the engine for a few months , pull the oil pan and then tell me what you find,If you wan,t Ill save you some time, youll find a larger collection of metallic dust than you would ever want embedded in the engines bearings , stuck to those magnets, and youll find the bearings looking far better than they ever looked before!just some info,
just one of those magnets can lift a sbc cylinder head, and yes they work exceptionally well at trapping metalic dust
I normally place (4) one in each corner of the oil pans sump to prevent metalic dust from reaching the oil pump pick-up once you get them and install them youll see how much crud they prevent from reaching your bearings the next time you pull the oil pan, and never forget to use them in future engine rebuilds. BTW the site mentions that they can loose strength if heated over 250 degrees, don,t worry about it, the magnets stay well under 250 degrees even if the oil gets close to 250 degrees, because they are in firm contact with the oil pans lower inside surface and that lower outside surface outer surface is in direct contact with the outside cooler air, in the many years Ive used them they have NEVER showed any tendency to lose strength, if your worried about it just J&B weld them to the outside surface of the oil pan sump, they will work almost as well that way
http://www.jegs.com/cgi-bin/ncommerce3/ProductDisplay?prrfnbr=1770&prmenbr=361
for those of you not familiar with these they slip between the block and spin-on oil filters, they don,t work on all sizes of oil filters, and they are not designed to replace frequent oil filter changes or allow longer times between oil changes, they are usefull for installing when you make a trip to the track! and yes you need to remove them on a street car after returning from the track,they were never intended for street use!
keep in mind
the MAIN PURPOSE of pre-screens is to allow you a easy look at a SAMPLE OF the metalic, gasket,silicone and plasic crud that the oil system is pushing thru your engine,they are not designed to be filters,they do not trap 100% of the crud,(neither does your oil filter for that matter, they, the pre-screens, are designed to allow you to spot bearing or cam lobe wear quickly, but they only work if you take the time to INSPECT them frequently by spinning off the fillter and inspecting them,
the average oil filter has between 200 and 450 sq inches of filter area, thes pre-screen have less than 10 sq inches of filtering area,so they are easily at least partly blocked with crud and can and do restrict oil flow if you NEGLECT to inspect and clean them FREQUENTLY we used them all the time on race engines that we worked on every week , and in that application they are a great help in catching problems before they become major, but if your like most guys and only take the oil filter off durring 3000 mile oil changes THEY ARE A BAD IDEA for THAT APPLICATION
BTW most guys running race engines DON,T USE THEM as the ONLY source of info on engine condition MOST guys also cut open and inspect the oil filters themselfs to look for bearing material and signs of engine wear
now Ive said this before, you also should have installed the good magnets in your engines oil pan, simply because they can trap and hold most of the metallic dust that a failing cam and lifter generates from getting constantly pushed back into your engine to cause furthe damage
http://www.wondermagnets.com/cgi-bin/edatcat/WMSstore.pl?user_action=detail&catalogno=0001