Background: The COVID-19 outbreak has caused severe physical and psychological trauma in health care workers, with nurses at the forefront of patient care. Nurses in a resource-limited rural area, such as rural Osmanabad, Maharashtra, experienced extended working hours, mental stress, and compromised institutional backing. These circumstances contributed to a high burden of burnout and mental health conditions, especially in the post-pandemic period. Objectives: This study was conducted to see the prevalence and severity of burnout and psychological distress among nurses in Osmanabad after COVID-19. It also explored the association between occupational exposures (e.g., night shift frequency and peer support) and mental health outcomes to identify modifiable risk and protective factors. Methods: A cross-sectional study was conducted in the government as well as private health care settings of Osmanabad city. 80 registered nurses qualified, selected by stratified purposive sampling. Data came from the Maslach Burnout Inventory–Human Services Survey (MBI-HSS) and the General Health Questionnaire-12 (GHQ-12), and demographic and occupational variables. Descriptive, chi-square tests, and logistic regression were applied for analysis using IBM SPSS v26. Results: The presence of emotional exhaustion was 65%, depersonalization 42%, and low personal accomplishment 58%. Fifty-five percent of the participants were found to be psychologically distressed. Burnout was significantly related to variables such as common nightshift work (p < 0.05), the lack of peer support (p < 0.01), and non-exercise (p < 0.05). Conclusion: The study highlights a pressing need for mental health preventive interventions for rural nurses. Individualised interventions to help prevent burnout and encourage sustainable nursing practices in rural India (resilience training, institutional peer support, and workload adjustments) are needed.