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That has been discussed before at length before, but you are correct, this is the preferred method for dealing with cases of excessive oil consuming 8th gen Corolla/Prism 1ZZ-FE engines.
The short block will work just fine (block, crank, pistons, con-rod - basically everything below the cylinder heads) - no problem. Since your engine is VVTi - using the 2003-2008 engine's cylinder head is also a non-issue. You will have to reuse your existing accessories, induction and exhaust systems - most cases, those are perfectly fine.
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2002 Corolla S, 1.8L 1ZZ-FE VVT-i
2003 Matrix XRS, 1.8L 2ZZ-GE, VVTL-i (RIP)
2009 Matrix XRS, 2.4L 2AZ-FE VVT-i
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Linear Mode
