I am with Charles, the blade is beautiful and wouldn't be surprised when it will show twistcore in the fullers. So I don't see any reason to let the blade in this poor condition with some fresh rust at the edges. So I would polish and etch the blade. The wrapping at the handle I would replace also. A native would do the same when it is demaged.
A pity that the ivory pommel is demaged and I think that this can only be restored by someone who is an expert in this field.
I have seen a perfect ivory restauration by a kris from Jose here:
http://www.vikingsword.com/vb/showth...ght=ivory+kris
I think this kris is worth a restauration like this. The scabbard could be restored as well but need a practised hand.
Regards,
Detlef