Ken, I'm not really surprised that our CA Ag folks didn't care about rust. Presumably they inspect a lot of packages coming in (those plant-sniffing dogs...), and I've gotten a few nasty letters from them over the years, for my part in "importing" plants which they rejected for one reason or another - but never for rust or suspicious looking foliage.
A few years ago I received 2 plants off the Lily Auction which looked somewhat questionable (to say the least) - the foliage was somewhat of a sickly green but it was spotted all over with yellow. I dumped the plants into a soaking tub, and I swear that within a few days (a week, for certain) both had broken out into a YUGE amount of frank rust! It was horrifying! I threw out both plants and gave the LA seller a literary tongue lashing over it, and put them on my blacklist. (No, they never mentioned that they had rust in their garden, or that those particular plants were rusty. In the first case I might have decided to take my chances, but not in the second case.)
Teresa - sorry that you were burned that way. Why do some people have to be so... well.... evil? She must have been one of the 10% or so of the population who are psychopaths...