rusty places:

around fuse box, battery
all arches (mainly rear)
chassis legs, check along the entire length of car
check sills both inner and outer
inside boot, check for rust in floor, in spare wheel well, pull out as much carpet as possible and look underneath it
roll sunroof back and check in there
check where front wings join just inside the front door apature
check inside rear doors for panel replacements and rust


good saffs can be had for 3k, but there are also alot of dogs out there, so if you are not sure just walk away, go see a few cars even if they are more money give you an idea of whats out there.

as for the engine, check it from cold, check the oil, coolant and smoke from exhaust etc