Steel in a burner compartment rusts only if it has been wet, so rust flakes and scaling are a record of moisture that has been arriving repeatedly. Several sources are worth checking and each has a different significance. Condensation from flue gases backing into the compartment points to a venting or draft problem. Water from an air conditioning coil or a blocked condensate line above the furnace points to a drainage failure. A leak from plumbing overhead is simple but common. And a cracked heat exchanger can allow moisture-laden combustion products where they do not belong. The inspector's finding is that moisture has been present and that the source should be identified, because two of those causes are combustion-safety issues, and the rust itself may also be shedding into the burners and disturbing the flame pattern.