Here's a link to a HAMB thread on rebuilding a banjo rear.
http://www.jalopyjournal.com/forum/s...d.php?t=462776
I have further concerns about you "just needing a sleeve." To me, it appears that your rear was stored outside at one time with the torque tube up and uncovered which allowed water to get inside. That's what caused the rust. Be aware that there's no seal between what you see now and further inside. I'm guessing that you're going to see the same destruction inside the entire rear. IMHO
One last (probably should be first) concern: The vise grips AND the C clamp are both DANGEROUS! I use Pony clamps (see picture below) along with threaded rod through the center hole when disassembling a spring. Neither the C clamp nor the Vise Grips you're using are too stable under a load like the spring is causing and the spring can do a lot of damage to body and property if they get just a little bit out of position.