Thanks for your suggestions. Will see what they say but will buy some oil, too. I will repost if Toyota comes through but I am sure they wont.

 

Main point is - you are ways far from overhauling engine. Simply be mindful and check oil level once a week. When it drops down to the bottom line on dipstick, add about quart of oil.
I had that job done several times. 3, to be exact. Drop oil pan, remove head, remove pistons, overhaul. Very easy to do on four bangers. Costs about $500 in parts. About 8 hour labor. Good exercise on nice sunny day.

 

Those engines are nearly identical. The cams are different to make the hybrid run in an Atkinson mode, but that is all done with valve timing.

 

The reason your dealer is just now telling you that the car needs rebuilding due to excessive oil consumption is because the Toyota-free-fix window closed on October 31st 2016.

My Toyota dealer is notorious for ignoring looming problems until they're out of warranty.

 

I would not trust any dealer whatsoever: couple years ago my dealer told me I need new break pads when doing some recall service, of course I said no, since I do all smaller jobs myself, just bought new pads. Was I pissed when I got home, took the tires out and pads looked like new, as a matter of fact still running the same old pads now, about 40 k miles later. Don't trust what people tell you check the oil yourself and BTW loosing 1 qrt over 3k is perfectly normal. Correct me if I'm wrong but I think it was 1 qrt per 1k miles, to be eligible for recall engine repair? If you were burning that much oil your light would be on before 3k oil change.

 

It has to be >1 qrt consumption in 1200 miles.

 

ukrkoz is right. Ignore those guys and just check your oil. Mine has always used oil too. But, never enough for the dealer to rebuild it. Mine uses around 1.5qts to 2qts. now in 7500 miles. I just check it once a week and if it's a little low, I just "top it up".

The battery should be the farthest worry from your mind. I used to worry about it. Not anymore. It's looking like mine will make it to over 300,000. Still on the original 12v battery and original pads and rotors too.

Bottom line, if it runs good, runs smooth and does not put out a cloud of smoke while your driving... Ignore the dealer and everyone else, just add a little oil every now and then and enjoy it.