I sail a Macgregor 22 - a make and model known for its low price and cut corners. Yet my keel bolt is stainless steel. Seems odd to see yours rusting.
Chip V.
s/v Sand Dollar
Good Catch... that post made me go look at the picture again and there are other issues that need addressing as well. Your lock-down pin is also glassed over. My guess is that something like this happened....
The P.O. never bothered to lock his keel in the down position and/or didn't know he should. At somepoint the rubber gaskets dry rotted and started to leak so he glassed over them to keep the cabin dry.
I fear you need to drop that keel and inspect it. And then repair the pivot pin hole and remove the glass covering your lock-down pin. The purpose of the lock down pin.... if you see a bad T-storm coming or you want to really hotdog on a stiff breeze, you want to secure your keel in the down position in chase you get knocked on your beam. If the keel is free to swing, it could come crashing back up into the trunk and bust through... then your boat sinks in seconds. I'm not 100% sure that is the lock-down pin but I'm 90% sure. When you drop your keel for inspection... if you see a second hole that looks like that pin should go throught it, then it is the lock-down pin.
When you get the keel trunk right, you can keep water out by using a butyl rubber washer. McMaster Carr sells them...
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Just put the rubber side against the keel trunk and put a regular SS-washer against the bolt head. When you tighten it up, the rubber will close any holes and keep the water out... don't glass over... SS needs exposure to air to keep its corrosion-free properties. Otherwise the SS will start to get crevis corrosion.