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Ok, the story:

I brought my 2002 Camry V6 with 206k miles to a backyard mechanic friend for some preventive maintenance (water pump, timing belt, etc) as well as to replace the rear valve gasket cover which had a very small leak that didn't produce anything on the ground but had a burning smell as it dripped on the exhaust. Car had a CEL for the catalytic converter. Oil changed religiously at 3-4k with no consumption detectable on dipstick. MPG averaged 23.


Received car back and first thing I noticed was puff of white smoke in the morning (was not too big but noticeable.) Next was gurgling sound in the dashboard. Next was the exhaust stunk badly - kids say it smells like burning gun powder. Then noticed mileage dropped to 16mpg. Checked coolant and reserve tank was empty. Took no more than 1/2 gallon to fill. Couple days later the oil light blinked on for about a second and then went off. I pulled over immediately and no oil on dipstick. Went right across street and got oil change. Checked CEL and found both upstream bank 1 and 2 o2 sensors are bad. Replaced front sensor.

Took car on roadtrip to Seattle. Gas mileage went back up to 23 mgp. Total trip burned through 5 to 6 quarts of oil (about 700 miles round trip) Coolant is not contaminated with oil. Oil is not contaminated with coolant.

Was told while on the road from a guy at Oreilly's that engine is probably toast so I bought some snake oil (Lucas) which did nothing. Replaced PCV valve, poured seafoam into valve cover via pcv valve and intake side to clear baffle in valve cover if there was sludge. Still slight visible smoke all day with morning puffs increasing in size on startup.

Read about Engine restore. Put it in. Engine almost immediately stopped smoking and no more puff in the morning. Exhaust still stinks badly though. Did great for several weeks. Time for oil change. Added another bottle of engine restore. Morning engine puff came back with a vengeance and mileage back to 16ish.

I'm told it could be rings or valve seals - both of which would cost what the car is worth to fix.

Would really appreciate any advice on things to check or do.
 

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The white smoke in the morning is a symptom of a sludged engine. I won't go into the reasons now, but I had this with my 2003 Avalon and it was sludged big time. Just replacing the PCV valve doesn't solve the problem. You have to clean out the sludge from under the baffles and around the PCV valve hole to solve the problem. I doubt your problem is rings or valve stem seals. Ask your mechanic! If he pulled the rear valve cover, was it a sludged engine? If you can't get a straight answer, pull the front valve cover yourself and have a look. Here's what mine looked like when I pulled the front valve cover. Use an E6 reverse torx socket to remove the 2 bolts holding the wire harness to the front valve cover. The set is available from Harbor Freight for $10.


 

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Or, if you want to do a quick test, just disconnect the hose coming from the air plenum and going to the PCV valve. Plug the hose with a drill bit or something similar. Does the white smoke stop in the morning? Does the oil consumption stop?
 
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