I had the same problem with my Caliber 33 which has an encapsulated keel. There was a crack in the bilge (bad repair job by a PO) that allowed water from above to leak down into the keel and eventually out through a spot low on the keel. I drilled out the spot where the water was seeping out, to find that it had undermined the concrete the builder had used to fill in the spaces around the iron billets used for ballast.
We started the repair with a temporary repair in the bilge to ensure no more water would pass through. (Also put a new mast boot on the mast at deck level).
On the keel, we ground out an area about 2 feet across, brushed out all the loose concrete, put a heat lamp on the area from early May until mid July. Then repaired the area using a rust encapsulating 'paint' on the exposed iron, filled with a hydraulic, vinyl concrete, laid up multiple layers of glass and faired out with epoxy. Then went back to the bilge, ground out the temporary repair, and effected a proper repair of the bilge with several layers of glass and epoxy.
Since these repairs were beyond my skill level, I paid the yard to do the work. Total cost was about $2500, of which $2000 was labor. The iron only rusted after it was exposed to open air, so rust was not an issue. As the water ran into the keel, it had followed the seam between the glass and the ballast, so the whole keel was not affected. So fear not; the problem you face is probably not catastrophic and cost of repair might not break your piggy bank. And odds are that, after repair, your boat will out live you and her next owner.