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Have your shop replace all of the valve guides, they wear out at around 175K miles anyway. Worn valve guides will not harm the engine, but they will allow oil to pass into the manifold and that leads to oil consumption and dirty cat converters/sensors.
The amount of rust in the cylinder bores had me discouraged. I have never seen that much before. You are correct about the 5 cyl blocks, they are quite hardy and I have seen factory score marks on cylinder bores with over 200K miles in the engine - absolutely amazing.
Nothing wrong with a boring Toyota, my brother loves them and drives them over 200K miles before getting another. I find them uncomfortable and the handling too slow.
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My back feels better when I sit in a Volvo seat
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