gwarden, yes clean derusted parts can be powdered coated. Most shops will glass bead or sand blast the parts before powder coating. Check with your powder coater they might tell you not to bother derusting as they will blast anyway. Remember that there is other special treatment to powder coat such as removal of rubber parts and bearing races. Bolt holes and threads should also be protected. Most qualified powder shops will cover or plug holes/threads automaticly.
Kenny