I pulled my distributor cap the other day to check the rotor and found that inside the reluctor is corroded and the core of the pickup coil is rusted, it looks crappy. What caused this? There has been no water on the distributor or anything else for that matter. Anybody else had this happen?

It's due to them being ferrous metal and being unpainted/plated. Condensation can form inside the cap because it gets warm and then cools off. Use an old tooth brush with some WD-40 or the like and clean it. Wipe off the dirt and excess spray and repeat this occasionally as necessary.

same thing as mine i just clean it from time to time,down here in the swamp even the tires get rusty.

this is a common problem afaik and i've found it in my MSD. i think one cause is that high voltage discharges generate ozone in the cap which is highly corrosive

Drill a couple of vent holes in the cap to help reduce build up