The passenger side of the bed was showing some rust so I thought hit it with a grinder real quick and prime it. Well the moment the grinder touched the rust the metal just seemed to disintegrate. After I was done removing all the really bad rust I have a hole about 2"x2" and behind that is some foam. What is this foam for other than gather water and salt to allow rust?
I'm planning to remove the foam and probably more metal so I can weld in new metal or a patch panel, and por 15 it. Looking for inputs or opinions on how to battle the rust. Should I even bother to find a replacement for the foam?

 

There was a recall on my 04 for removal of a butyl pad inside the rear fender. Could that foam you found be part of that pad? I wouldn't replace it, whatever it is.

As for treating the rusted area, if the metal is solid, I've found the POR15 you are using to be very good at sealing and preventing any further damage.

 

yep - my 2004 FX4 went through the recall. They pulled off the pad and re-primed under the wheel well.

The original thought (by Ford) was that the pad would help dampen the exhaust noise. Then they found that it rusted out the fender.

You'll have to find and thank the original owner for being too lazy to take it in for the free repair.