So the valves are bent for sure? Did they try putting a new chain on and starting it up or did they visually inspect the valves? or just assuming damage to the valves because it is an interference engine?
I assume they calculate that dropping a new used engine in the car is cheaper than the labor to rebuild the current engine.
As for the oil cooler, I do not see why not unless I might be missing something.
And yes, It is weird to have a chain break like that, unless there was something else going on with the engine causing excessive stress on the chain. Is it the original chain? or has it ever been replaced or has it ever been removed and replaced in the past to fix something else, I would expect this with a Chinese knockoff counterfeit chain.

 

That is pretty unheard of. Maybe you and your friend can go over this and make sure the replacement is bulletproof.

 

Did you have a cold start rattle in the engine before it broke? Timing chains do not break on these 2grfe engines, but the vvti gears do have issues. Mine broke, but luckily no internal damaged and was repaired by replacing the vvti gear.

You probably don’t need the oil cooler unless you tow. If the used engine is the same year; Replace the vvti gears on the used engine before install.

 

You might want to post this n the Highlander Second Generation forum...I know the recommended interval for the 1st generation timing belt is 80,000 miles. Not sure about the second generation...

 

2GR-FE uses a timing chain to drive one cam on rach head, plus a small chain on each head to join the cams. The previous MZ v6 engines use a belt.

 

I know its a moot point now but there is a YouTuber Call THE CAR CARE NUT, and he only works on Toyota's. He has several videos about the 1st gen 2gFRE engine and issues that have come up and how to stop them from becoming real problems. Yes Toyota's timing Chains should probably never break. If you are going to swap the engine and keep the vehicle long term, watch his videos on what to look for and take care of with the replacement engine so it won't become a problem.

 

I don't see why the installer cannot move it over to the replacement engine. Never the less this is a extremely highly irregular failure. Your OCI and oil used would be highly suspected for this to occur at all especially at low mileage. The point of chain engines is unlike a timing belt you don't have a maintenance item you have to replace at big cost.