1998 Camry 2.2 liter i4 engine replacement

This is a multi-part question, so any advice on anything is appreciated.

I was just told by the dealership that my 1998 Camry LE 2.2L 4-cylinder engine needs to be replaced; quoted me $5000 for a new engine. I questioned the dealership about the 8 year, unlimited mileage warranty for oil gelling/sludge on the 1997 to 2001 5SFE engine (I could get the engine replaced for free if oil gelling damaged my engine). They said my engine problem wasn't related to oil gelling. How do I know if the dealership is telling me the truth? What would I look for to determine if oil gelling caused the engine damage (I think a rod was thrown based on the knocking sound the engine was making, but the dealership was going to charge me more money to go into the engine to find out)? My car had all of the symptoms of oil gelling before the engine damage: smoke from the tailpipe on startup and acceleration, burning oil, evaporating engine coolant. I read that modifications made to the 97-01 5SFE engine to make it a ULEV engine utilize a closed chamber to get a complete burn on the fuel, thus causing the engine to run hotter and the oil to degrade faster. The manufacturer recommended 7500 mile oil change interval may be too long for this engine, and thus the oil gelling problem. Is there a good place to go to get the problem diagnosed other than the dealer?

In terms of replacing the engine, most of the people that I have spoken with that had rebuilt engines put in their cars have been dissatisfied, whereas those that have had used engines from Japan put in have been happy. The local installer for used Japanese engines wants to put a 2.0 liter 3SFE engine in my car to replace the 2.2 liter 5SFE. It looks like the 87-91 Camry used the 2.0 liter 3SFE engine, and it may have been in some 92-96 Camrys as well, although my friend with a '94 Camry has the 2.2 liter 5SFE engine. The used Japanese engines only have 30,000 to 40,000 miles on them. The installer removed the valve cover for me and the valve assembly was immaculately clean. The installer said it would be a little less powerful, but likely so subtle that I wouldn't notice a difference. He also said I would likely get better gas mileage. And he told me that the modern Toyota engines are not as good as the older Toyota engines. Anybody have any comments on rebuilt engines vs. used engines? Any experiences with performance differences between the 2.0 liter 3SFE engine and the 2.2 liter 5SFE engine? I can get a used 2.2 liter 5SFE engine from a junk yard, but it will only be warranted for 30 days, and I will have to wait for the junk yard to get another engine to replace the one I buy if it's bad (he won't give me my money back).

It's aggravating that I bought a Toyota to be my reliable source of transportation, and 7 months after I pay the car off and with less than 97,000 miles on it, I am having to put at least a couple of thousand dollars back into it. Any recommendations would be appreciated.

For that amount of money (or a little less), you could drop in a 3SGTE and a Solara E153 manual shift tranny and have the work done....

You will need the ECU, wiring harness, and a pair of V6 axles.

"How do I know if the dealership is telling me the truth? What would I look for to determine if oil gelling caused the engine damage...?"

If you threw a rod, sounds like your rod bearings were starved for oil. If it was an oil problem, the crankcase should have a significant amount of black goo remaining in it after you drain the oil, particularly on the oil pick-up. This is not the only thing that could cause a bearing failure, so you would have to drop the pan and take photos, collect samples of the goop you find (if any) and don't clean anything until it is settled. If you have a mechanic help you on this, a statement from him about the condition of the engine interior will help, particularly a description of the oil pan contents.

Normally, in oil gelling situations, there is goop in many places in the engine, so you can also look for these, but the pan is the place to look for bearing failure-related deposits.

If the pan is clean, I don't think you have a case.

I may be wrong, so I hope others give an opinion on this.

used 5SFEs should cost at most $1600, and the install is simple.

3SFE has a 120hp engine with A LOT less torque than the 5SFE. You WILL notice the difference, plus it may not be legal to put it in in your state since no 3SFEs were used stateside since 1991 model year, and engines usually need to be the same year/OBD series or newer, plus you would need custom mounts to put it in since the frame/chassis are different between Gen 2 and Gen 4 camries.

$8000 should be spent on putting in a JDM 3SGTE in your car and would include all the necessary labor, and you'd have a car putting out anywhere between 225 and 260hp, but like my boy Toyrolla says, you need the E153 manual tranny from a Solara or a custom from Level10 to make it work.

If you want to dis/prove the dealer's judgment, go to an indie shop that works on Toyotas and see what their diagnosis is.

In the end, you will still have to convince Toyota.

I have a 01 Camry. My engine has a hole the size of a baseball. Toyota told me that if there was sludge in the motor that they would replace it. Of course when the dealership got the car and took it apart there was no sludge. They want $6,500 to repair. I had the car removed and I am fighting with Toyota. There is an apparent problem with the motor if they know about the sludge. Don't drive it you may throw a rod through the block. If anyone else has the same problem please let us know.