Thanks Everyone,
You may be saving me from an expensive mistake.
Charlie,
The reason I thought this was minor rust is because when I bought my 1983 240D I had a water leak up by the clutch pedal. After cleaning out the fender area drains, I discovered a 4" diameter hole in the firewall above my clutch! After welding in a piece of sheet metal and mar-glassing around the edges, and sanding and repainting my floor, I though this looked pretty minor
