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Get a second opinion!
For starters, you motor is a non-interference engine. How rods and such would get damaged due to the timing belt snapping I don't know.
Your distributor blew as well??? You are right about the cam turning the rotor and not the other way around. Once the timing belt snapped the cams would have stopped turning and thus your distributor arm quit turning the rotor. I'm just saying I've NEVER heard that one.
Plain and simple go else where. The shop where you took it sounds real iffy!
Are they lying? Could be. Or maybe this guy just does not really know Toyotas very well. Either way your not going to get the repair quality you need. I always go to Toyota. The price diff (which is usually not that great) is worth it. The dealer makes money in other ways and is not totally dependant selling you stuff you may not need.
Just my opinion.
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