What should I do with this Rhydon?

Don't waist your only TM on him. You can keep him for gen 4 evolution to rhyperior.

Definitely save it. I know this is speculating, but Rhyperior will EASILY become a top 5 Pokémon (excluding legendaries) in the game. Rhydon's stats are good now, so Rhyperior's will be even better.

I would transfer it. Ivs are the only thing you can't change.

How many Rhyhorn candy do you have?

keep it and use as-is, don't waste candy/dust or TM's on it. rhydon are pretty common when boosted so i'm sure something better will come along but it has uses (vs.fire, gym defender) before then.