Great bike and an awsome find! The problem with living in CA (among many other problems) is that most of the state has been picked through already and most of the "deals" and "finds" are too far and few in between. When they do come up, especially at auctions, people think that the rustier it is, the more money it's worth.
You did a very nice job for $1. It's perfect the way it is. I'd change out the wheels/tires, add a seat and start riding.