4) What do I do now?

Unless it's just a monster anchor, why screw around with it? You'll spend the
better part of a day trying to clean it up,
some money to regalvanize it, when for less than a whole bunch of dough you can
get new and in good condition.

Or....
Have a used marine store in your area?
We have a few out here, and it isn't unusual to see medium size galv. anchors
for sale at about $1 a pound.