Resources needed:
Text font, rust texture 1, rust texture 2
So I'll go straight to the effect although I already have a grungy background ready. You can see how I made it if you download the psd file but let's go to the rusty effect part now.
Type you text using the Mephisto font that I provided you or other font if you want but you should use a bold one because this effect looks better on bold fonts. I typed the name of a fictional monster. The text size I used is 50px.
Open "rust texture 1?, scale it down to fit the text's width and paste it as Clipping Mask.
Open "rust texture 2?, scale it down and paste it above the other one
also as clipping mask. Apply an Unsharp Mask Filter by going to
Filter>Sharpen>Unsharp Mask. Use Amount 250 and Radius 0,4. Apply
this filter to both textures.
Change the Blending Mode of "rust
texture 2? to Overlay.
Now, this already looks rusty to me but we can make it look so much better...
Double click the text layer on the Layers Palette to open the Layer Style window and apply the following effects:
Drop Shadow
Inner Shadow
Bevel and Emboss
Now it looks a lot better with the 3D effect. At this point you could leave it as it is if you like it but I also added edges because I like it more with edges, like in the image below.
In order to make the edges like in the image above, Ctrl+Click the thumbnail of the text layer on the Layers Palette to select the edges of your text.
When you have the selection around the text, create a new layer above the text and his two clipping mask texture and go to Edit>Stroke. Set Location to Outside and Width 2 - 3 pixels depending on the size of you text and the spaces between the letters.
We are going to use the same steps as for the text to add the "rust texture 2? as clipping mask on this stroke so you can duplicate the layer with "texture 2? that you used on the text and paste it here as clipping mask and set Blending Mode to Normal.
The edges look to sharp and flatten so lets make them a bit more 3D too. Open the Layer Styles window for the stroke layer and apply this settings:
Inner Shadow
Bevel and Emboss>Texture
Color Overlay
Well, that's all it is to it, not extremely difficult, but definitely a real rusty look. Below you have the final result.
