We recently purchased our used 2001 Sequoia with the factory JBL 6 cd changer. It HAD the ERR3 which made the CD unusable. After searching the web and many forums, I found other Toyota models with a similar problem, but had no good answers. I tried the credit card swipe trick, didn't work. I finally took the dash apart and the player out, removed the cover and it had 5 cds (4 original cds, 1 copy) and 1 DVD in it. Some threads talked about not using any disc other than a true CD from the store. I am guessing the DVD (which was thicker) caused the problem out right.... For the sake of any other owners out there, here is what I did (It's EASY).
With a small screwdriver, flex one side of the AC vents and pop them out (x2), then remove 2 phillips screws. Carefully pull console out and pop out bottom with a screwdriver (has 2 press in clips that come out easy). Once console if off (laying on center console), use a 10mm socket and remove 4 bolts. Take radio out and carefully unsnap (there is a little clip to upsh in) the power supply (white plastic unit with all the wires). Unplug (pull out) the black ground wire and the antenna (close to each other). Next is to take the top cover off, by unscrewing the 4 small phillips srews. Replug in the power supply (you can see the stuck CDs in there). Power on the vehicle and hit the eject button. The CDs should come out on their own. If not, you will have some work to do. That was it. Replace everything in reverse order and your done. My radio had some writing an little stickers on it from 5/03 and 8/03, so it looks like the unit was serviced 2 times already (that sounds par for the course with these units, based on the forums.... they fail often for some reason).
Good Luck, this is an easy fix for the 2001 Sequoia or any year that has the center console like ours.