I actually haven't had a chance to get back under there yet but I might tomorrow.

 

Yes, it's rust all right...
All the way through too.

The frame rail ends are cheap for these cars but the labor's not.
You need to know how bad it is as soon as possible, so you can prepare for repairs.

While you're at it, check your torq boxes too.
Undercoating has a tendancy to hide rotting spots.

 

Where is the car from, or where do you live? See how severe it is and depending on the extent of the rust,I would use this undercoating. I used this for my car and it's been 11 years and I live on the East Coast.

http://www.permatex.com/products/aut...dercoating.htm

 

Undercoating doesn't fix rust and in fact can make it worse. Rust happens when water can't escape. If you undercoat rust all it is doing is sealing it in. If water is getting behind there and the undercoating keep the water from escaping it will make it worse. For example,the doors on Mustangs tend to rust out at the bottom becasue dirt gets in the door and plugs the drain holes. The dirt then holds the moisture and the door rusts through. It doesn't really matter if the door gets wet inside as long as the moisture has a way to escape.

 

I was able to get under the car today (only briefly)and take some pictures with the undercoating peeled back.
Unfortunately it doesn't look good. I don't think it's completelyrusted through yet but its close.

 

Yup just as I thought. This car needs some surgery. You might as well beat on it a bit with a hammer and see how bad it is. You aren't going to make it any worse and rust doesn't provide any strength.

 

Undercoating overrust is not a bright idea...
It's like giving up smoking and doing heroin insread.

Looks like it's the bottom of the rail.
You have a double thickness in that area to give strength to the shackle sleeve.
You might want to scrape off the old undercoating all around this area to make sure the rail integrity is not compromized.
Upon cutting out the bottom, POR15 will be your best friend.

I have restored plenty of these cars, and usually the sides of those frame rails hold up good.
Gravity is on your side.

 

I guess I'll take a whack at it again on Tuesday after class to see how far it spreads.

Also, does anyone know about how much something like this would cost to fix?

 

If it's just patching up the bottom, like your pics show, and rustproofing the area, it's a $200/$300 job.
Two hours job max for a shop with experience,and A LIFT!!

Get everything cleaned up first and take it to pro.

 

Replace those rails and anything else that needs it since it will be apart at the time. That is a major structural item and you don't want to half way fix it, do you