Not being able to scrub or dry the recesses of the pan is the cause of your flash rust here. It is the nature of the beast confronted by all who restore cast iron. Find a way to eliminate it or prevent it, and you are on to something then.
Of course, the first thing I noticed about your pan was the raised dot appearing in the medallion logo on the bottom. That’s a shift mark. I would appreciate it if you would take a close up photo of it and post it under this thread:
http://www.griswoldandwagner.com/cgi-bin/yabb/YaBB.pl?num=1407724173As for the yellow precipitate, that is more than likely ferric citrate forming as a result of the citric acid bath. Your subsequent brushing of the pan removed the precipitated iron salt, so I would expect you are clear to season it now if there is no flash rust left under where the precipitate was covering. Flash rust is not something that you can easily prevent. The amount of flash rust your piece develops is dependent on how much of the post-electrolysis reduced iron you can remove by scrubbing. That is the reason why pans like these can be so frustrating to clean. It may be expensive, but many here use Evaporust (sp?) to reduce/eliminate scrubbing. The only alternative is manual scrubbing with steel wool or small brushes.
As you can see in the photo below, part of my solution was to find an earlier version of the pan that has the cutout open frame. Once Lodge started making the closed frame version of the pan (like the one you are cleaning), the underside of this pan becomes a nightmare to restore/clean. It makes buying a new preseasoned pan look easier than cleaning a used pan.