I apologize if this is the wrong forum. Didn't know whether to put it here or in Engine/Transmission.
Immediately below is the whole story in full detail, if you don't want the specifics just scroll down until you get to the TL;DR, it's underlined and in bold.

Alright. Here's the deal. I have an '01 Chevrolet Blazer at 131.5k miles now, 5 speed manual transmission, V6 engine, came with an electric engine warmer.. other than the 2WD and low mpg, I love this truck.

Anyway, so I'm working 70 hours a week last October (2013) and I come to work one day, get out of my vehicle and notice a gush of liquid coming from below. Pop the hood, crack in the radiator, fortunately I expected this about 20k miles ago and have a new one at home with a new overflow tank. But first I want to try and flush the cooling system and get rid of any deposits in the engine.

There are two problems that turn this into a disaster:
A. The water in my area is full of minerals, as is evident by the humidifier I have at home: when the humidifier is empty of water, opaque white residue is everywhere. So I don't want to just use a water hose, I want my engine to remain mineral free.

B. I am working 70 hours a week. I literally work, go home, shower, sleep, go back to work. Replacing a radiator is easy easy easy but I have no time.

So my options are bring it to a trusted mechanic and pay $200 for them to do it, or get a friend who has worked on vehicles since I've known him, though not professionally. I trust him too, so he offers to do it for free minus cost of materials.

I tell him about the mineral problem, he tells me he'll buy distilled water from the store and give me a running total. Cool. I tell him about the crack and replacement radiator, and not to waste antifreeze, just use the distilled water. He offers to put the new radiator in, what a friend.

Alright so everything goes smooth except there's a bit of miscommunication. He tells me he used only distilled water like we talked about, I end up giving him $40 for the water and his trouble, but what I didn't understand until just a few days ago is the new radiator ONLY HAS WATER IN IT. No antifreeze has been in my radiator for 5 months.

So it's 5 months later, we've had some freezing temps between then and now. I notice my engine temps getting to about 240F (~116C) and the heater stops working. Pop the hood, the radiator is dry with heavy rust. Call my friend, we figure out where the communication went awry (or else from what we remember, it was 5 months ago). So I buy more water to put in the radiator for a quick fix until this weekend where I'll flush the cooling system with the old radiator and replace it myself this time.

TL;DR: Radiator has had only water in it for 5 months, freezing temps since, the whole thing is rusted.

Here are the questions.
A. I filled the radiator full of water, gave it a few minutes with the heater on to try and remove bubbles, topped off, filled overflow tank.. 4 days later everything is dry again and it needs another 2 gallons of fluid (its not the weekend yet, can't do replacements until then). I keep it on a level plane of cement and have noticed 0 leakage after it sits over night. Where is the water going? Is it evaporating? The rust is like a giveaway. I notice some rust residue on the edges of the right radiator hose (from engine;to radiator), like something is escaping, but again 0 residue on the cement where it rests. That hose is the only evidence liquid is escaping. I thought it might be that the freezing temps (lowest was 25F [~ -4C]) froze and expanded the water, damaging a hose or cracking the radiator, but there are no visible cracks that I can see in the radiator or hoses, or rust where water might be escaping from a crack, there is only rust on the edges of that one hose. The only thing I can think of is the water is boiling and escaping, but I thought these things were air tight.

B. So now there's rust all in my engine's cooling system. A loud humming noise is now present when I accelerate, and I'm going to blame this whole event. What should I do to get the majority of this rust out? Do I painstakingly pull the left hose out (from radiator;to engine), empty what I can, fill it back up, let the engine run so it can cycle through, rinse and repeat until I get clear results.. or just use*a water hose, try to flush the system that way, and don't worry about mineral deposits because it's quicker and better than having rust. Should I even use radiator flush?

Suggestions, tips, anything would be helpful really.

Edit:
For some reason the forum added asterisks to the post. I removed them but if any remain, they mean nothing.

 

Not having proper coolant will cause the rust but it's not a deal breaker. 25 degrees for a long period could cause problems if you bust a freeze plug on the block or rupture the radiator. Since you said that there were no visible leaks either the water is boiling away into steam, slowly evaporating on the block or leaking internally. I'd start with flushing the system with your regular water supply, draining the system the using bottled water along with the proper amount of coolant. I don't think you really need to use distilled water. If you're still loosing coolant after that then you'll need to do a pressure test to find out where it's leaking. You're right around the mileage where the lower intake manifold gasket fails.