Years ago I purchased an axe from Ace for camping and bushcrafting. At the time I was still new to the hobby so I did not understand what made a quality axe nor what was appropriate camping equipment. After using and sharpening it, I gave it away and decided to replace it with a higher quality one. For bushcrating, I've filled that role with the Wetterlings Backcountry Axe; for everything else, refurbishing an axe head is the most economical.
On eBay I purchased a single-bit head for $22. It weighs about 2.5 pounds and was made by the Kelley-How-Thomson hardware company under the brand Hickory. According to the University of Minnesota - Duluth:
"The Kelley-How-Thomson Hardware Company was founded in the 1890's as a tool and hardware jobber for the northern lumber and logging industries, and by the 1900's was shipping a large line of products marked Hickory, its most famous trade name, out of its South 5th Avenue warehouse in the waterfront wholesaling district of downtown Duluth. "
For a brief history of the company, Fishing for History has a good article. For being 60+ years old, it had limited pitting and while there was surface rust the edge was fixable with the proper application of files and rods from the Spyderco Sharpmaker.
Step one was to remove the rust. I let it soak in vinegar for a few days; this removes major rusting and applies a patina by oxidizing the steel. After the vinegar had turned dark and stopped bubbling I took it out. What's cool about this process is you can clearly see the heat-treatment line along the cutting edge, much like using an acid to etch Damascus steel.
The poll of this head had mushrooming (steel overhang) from hammering that needed to be removed. If I had left this there's the possibility that it could chip off when being used. This is done simply by filing the edges either flush with the face or with a small bit of chamfering. While I had the file out, I filed the edge back to remove major chips (which feels completely unnatural if you're used to sharpening knives).
More recently I have used Naval Jelly with good results, but you need to either paint or oil it to prevent corrosion. I wanted a shiny finish, so I removed the patina with 120 grit sandpaper. Raw steel will rust in a matter of hours, so I applied a light coat of Hoppe's gun lubricant, though WD-40 and any number of other light oils would work.
Cody on Wranglerstar was a big inspiration for this project. I've embedded the video below I used as a reference for the re-handling process.
Being my first attempt at this, my process was not nearly as smooth. The first issue is Ace had only one, 36-inch handle in stock and I was impatient. That's a fairly long handle for what is effectively a 2.5# boy's axe. Further, while it's pretty, the heartwood/sapwood mix you see in the first picture isn't the strongest choice. The grain pattern is correct, so I went with it.
The final step is a healthy application of boiled linseed oil while wearing nitrile gloves. I applied about three coats to the handle over the course of two days. Finally, I wrapped the head in a ziplock and filled it with lindseed oil. This swells the wood in the eye and further tightens it. You can use BLO on the metal to preserve it, but it dries with a yellow, crusty finish I don't find aesthetically appealing.
For more information about axes and axe maintenance, the USDA's Ax to Grind book and videos are great resources.