yea my prizm uses oil as well... I just buy it by the gallon at walmart and dump some in every 2 weeks... cheap car that I'll drive till it dies ... 210k and still going.
As for your headlights ... mine had the flashing high beam light for several years before anything else failed .... print out my post above and see if some of that will help you.
Different year prizm but probably very close to the same.
I think everyone goes for the DRL first and I'll bet in most cases it's a ground problem and not the DRL itself. After I found the bad ground on my car I disabled the DRL and my headlights work fine now.
Good Luck with your problem and have a great thanksgiving !