As a result of a squeaky rear brake and a conversation with rossko and Klompy the other day, great to catch up guys, I thought I would pulled the rear brake off, have a look at it and give it an overhaul. I found a slightly damaged seal and behind both pistons I found a rusty looking watery oily substance. (You can tell I'm no mechanic). What do you guys think? Has anyone seen this before? What may have caused it? I mean I intend to clean it up and put and overhaul kit in it but I thought I would get some feedback. I will probably do the front brakes now after seeing this.

Clean it up with one of those green pot scrubbers and if the pistons are nice and smooth and the bore of the cylinder is the same then put a kit through it and it should all be sweet.
Be carefull with the piston as it may be made of aluminium with a hard anodizing facing but they usually survive the rusty stuff.
Cause fluid that probably ha not been changed in 10 years and has more water than fluid and there goes the rust.
One question is it an ABS model. The rusty stuff can cause problrems in the Modulators and they can't be serviced.

Non ABS thanks mate for the advice.

When you clean brake parts make sure you don't use petrol or oil based cleaners metho and green scour is good, also make sure you have some rubber grease on hand for assembly.

After a clean and a new set of seals, and after I tappered the leading edge of the brake pads the loud squeal in my rear brakes has gone. So please when a job, even as easy as this, comes off.

nice win gp !

woowoo worked mate...such a simple thing a small chamfer on the leading edge of a brake pad...I suffered a squeal for months till I sussed it...
by the way I hate it when kids sell there bikes or cars and they say their breaks are new.....

Thanks for the advice Klompy. All is good up here in beautiful Tamworth.

I found simmilar mud in my brakes (K75 & K1100)
just a common result after the decades
even new fluid each year is not enough to get that stuff out

my experience:
only complete overhaul incl new brakehoses and complete dismounting / cleaning of the brakepump does work
all hydr. parts/gaskets can be remounted with ATE PASTE