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So she got 53K out of the original brakes, and then 25K? That's rather suspicious. Some people ride the brakes a lot, which can cause short brake pad life and brake rotor warping, but since she got 53K out of the originals, that can't be the problem. I think they're needlessly replacing things. The brakes shuddering could be fixed by simply turning the rotors. It's not necessary to replace the pads after turning the rotors unless they're worn out.
As far as the brake lines needing flushing causing the wear and tear on pads and rotors, I'd call BS on that. If the fluid was 10 years old, I'd say maybe your caliper pistons could be corroding and sticking, which could cause premature pad wear out and rotor warping, but at 1 year and 7 months??? Not likely.
As an example, I had my Avalon in the dealer's service shop recently to find the source of an odd burning smell which turned out to be a plastic bag that had stuck to the exhaust pipe. They also recommended I replace the tires, front brakes, serpentine belt, power steering pump belt, flush the coolant, and change the oil (and a couple of other things I can't remember). Of all that, the only thing it really needed were the belts, and I had a set sitting on my workbench waiting for me to get to. The oil had been changed only 1k miles ago, and the coolant had been flushed less than a year ago. I wasn't sure about the brakes, so I took a look. There was better than 3/4 of the pad thickness left. Needless to say, that dealer's rep took a huge hit in my book.
As for the smoke on startup, I'd say it's most likely a coincidence. While dealers can and do try to upsell needless services, I'd be really surprised if one would take the risk of resorting to sabotage to generate service revenue.
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1992 Camry LE, V6 (3VZ-FE), ABS brakes, 330k miles, dark emerald pearl, owned since new.
1996 Avalon XLS, ABS brakes, moonroof, white, acquired w/ 139k miles, now at 261k.
2001 Yamaha FZ1, Ivan's jet kit, resprung all around, Ohlins in the rear, Race Tech cartridge emulators in the forks, 45k miles.
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