Hello Detlef,
I may be an old fart, but I am really weary of power tools being utilized for such restoration attempts. Chances are very close to nill that you'll be able to keep the original temper of any traditional blade (we're not talking about specialized modern tool steel here), especially along the edge! There is a reason why continuously water-cooled grinding equipment was utilized in factory-like settings during the good ol' days...
For a real learning experience I'd stick with manual tools.
Considering that the whole blade surface will have to be repolished, one might want to start with electrolytic rust removal for a thorough initial cleaning. If the pitting happens to be really deep, it might not be feasible to polish all the pitting out (unless you aim at a miniature kindjal); remaining holes may be filled with epoxy or hard wax.
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When you use horn for the handle this could be a way of restoration. 
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Sounds like I'm not the only one who believes these "hilt scales" to be downright ugly!
Regards,
Kai