Flex augers are better for the corrosion issues you been seeing, but there are probably some things that can be doen to use what you have for the time being. We had a different issues with our flex auger, but I think the fix application could be the same.
Iron Oxide, or rust, is actually harder than the base iron it forms on. Any component sliding against it will not only abrade off some the the rust, but will also have some of itself abraded off in the process which isn't good in the long term but may not be that big of a problem once the system is used regularly and the rust is gone. BTW - it's the Chromium Oxide layer on the surface of CRES that makes it "stainless steel" and the tight, shiney, hard grain structure on the surface that works so well for our applications.
In our new flex auger, the factory packaged coils were coated in black machine oil to resist rusting while in storage. The contractor we bought the equipment from didn't wipe down the augers prior to install. We ended up buying some bagged barley (very cheap) from a local Co-Op and ran it through the auger to scrape off the oil. We set the mill gaps pretty wide and just let it pass through so as to not make the mill oily.
I would recommend cleaning out what you can............maybe even having it sandblasted...........then just passing a view bags of hard grain like corn (whole or cracked, but not flaked) or wheat (not malted) through to scrub out any residue and go with that. Regular use will keep it shiney inside...........much akin to getting a regular polish every time you use it.
I would not recommend painting the interior of any auger system since the flowing of the grain will abrade off any finish you apply and will end up in the Mash Tun.