Three threads with some info on rusty water:

IRON in the pond water,

High Iron, Low pH in well water, and

Iron Colored Water.

I can't remember anything on Alum removing iron (specifically) in water, but you could try a small amount in a bucket of the water to see if that helped any.

"Live like you'll die tomorrow, but manage your grass like you'll live forever."
-S. M. Stirling
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