Still waiting to reach a resolution with the junkyard. On Saturday it was "Call Monday when so & so is in." This morning (Monday) it was, "let me check and and get back to you in a bit." This afternoon it was "Yeah sorry we're still looking for it, we'll call you by end of day" ("it" being the 90,000 mile engine from the car reported salvaged 5 years ago). Of course no call yet.
Tomorrow I'll start losing the friendly happy go lucky demeanor and ratchet up the assertiveness. I hate conflict, but this car is actually for my sister and I find it a bit easier to spar on someone else's behalf.
On the plus side, a package I ordered when I planned on just doing the head gasket came in today:
I find complicated/overwhelming new tasks much easier with a proper factory manual. And the good news: if we do replace just the head gasket, the engine block does not need to leave the car as I feared in the original post. Highlander hybrid head gasket replacement is still a major project with 61 numbered steps and several more nested sub steps (and that doesn't include add-on maintenance like plug/thermostat/water plate/waterpump/timing belt/idler/tensioner/cam seals/crank seal replacement).
Most of those 61 steps are just tedious work removing familiar components to gain access to the heads (e.g. "remove front suspension brace" - aka the strut tower bar), but removing the inverter/converter will be new to me. Those specific instructions are further detailed in a section in Volume 1a with 25 numbered steps of its own (plus several more nested sub steps).
All in all replacing head gaskets seem like a doable challenge for anyone organized & methodical (with the space & tools). I'm leaning back towards the new headgakset route should we not find a low mileage used engine.
On that note, 6 local yards currently have hybrid-compatible 3MZ-FEs, but only 3 others claimed to be under 125,000 miles:
The claimed 103,000 mile engine was associated with a VIN salvaged with 180,000 miles in 2021.
The claimed 105,000 mile engine was associated with a VIN last sold with 123,000 miles in 2019 (and salvaged in 2021 with unreported mileage in a state 1500 miles away from the last sale).
And the claimed 125,000 mile engine had a VIN with 210,000 miles last reported salvaged in 2021.
So basically 100% of the claimed low-ish mile engines from 4 different salvage yards were lies. Guess I need to be a lot more skeptical of this industry...
Looking over the full engine rebuild steps, they are almost identical to the Supra & MR2 engines I've done. The biggest difference is Toyota doesn't allow boring and just says to toss the block when excessively worn. The aftermarket does make sleeves, but I can find no good reviews which makes sense with junkyard engines as cheap & plentiful as they've been and factory engines lasting so long.
On the plus side? the factory max spec for ring tolerance is pretty generous. Toyota is a lot more particular about the valves & valve guides ("bushes" in Toyota vernacular). It seems likely that a proper rebuild would end up replacing bushes, which I'd probably outsource to the machine shop. At that point they might as well do a valve job and then the project starts to snowball away from a cheap 5 year commuter...