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Opals will and do occur along faults and cracks in the rock, where water has had time to percolate through it carrying dissolved silica. Once the water gathers in a spot and allows the silica (in a colloidal gel form) to precipitate, you'll eventually get opal. The rusty colouration in the rock is just that, rust (iron oxide). With the sandstone, the natural porosity of the rock allows silica rich water (usually slightly acidic) to percolate through the pores and deposit opals in the surrounding rock as well. Over time, you'll get a band of opal replace the sandstone on either side of the fault line/crack.
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