Blown engine situation, opinion wanted....

I work in the auto industry and have worked in a few dealerships. They cannot deny warranty coverage on the engine due to a suspension lift. Good luck trying to explain how a lift damaged the engine. Ask to speak to the service manager, and if that doesnt work call corporate Toyota and file a complaint and state they are denying warranty and cannot prove why. You'll get it covered, you just have to play the game with them.
 
OP sounds like a low oil shutoff was working, shutting off the engine. If there is such a feature.

Why it later ran until a rod spun, I don't know. Intermittent oil filter bypass failure perhaps. Loose pickup tube.
 
When I was a kid working in a gas station, the owner used to buy cars with a rod knock like this and fill them up with 90 weight gear old. Made them nice and quiet. Then he resold them for a profit. Not saying that is what happened here, but at this point you would never know.

I heard the same thing, but then I found out that 90 wt gear oil viscosity is not much different from 40 wt motor oil.

Don't Forget the Gear Oil
 
Zurich has the right idea, the pan needs to come off, the bearings, both main and rod, need to be evaluated. They will tell a story of what may have happened; run low on oil, low oil pressure, run without oil ( by accident) after an oil change for a short period, etc. Doesn't mean you did it, some incidents take time to show up, but when they do it can be in the form of a catastrophic failure.
 
1. Onus is on the dealership to prove it is a non warranty matter, if it indeed occurred while under term.

2. Magnuson-Moss Warranty Act. Read it.

3. Sounds like you were aware of a pre-existing condition. Jumping to the conclusion that "it was over RPM'ed by a young punk mechanic on the test drive!!" is silly and as presumptuous as the dealership stating the issue is related to your suspension changes.
 
I work in the auto industry and have worked in a few dealerships. They cannot deny warranty coverage on the engine due to a suspension lift. Good luck trying to explain how a lift damaged the engine. Ask to speak to the service manager, and if that doesnt work call corporate Toyota and file a complaint and state they are denying warranty and cannot prove why. You'll get it covered, you just have to play the game with them.

The dealership can deny warranty claims on anything they want, if it will stick in a court of law is altogether a different matter. Corporate will intervene by contacting the dealership and perhaps even sending someone to check the vehicle. Most likely this will be resolved in the OP's favor, but if they want to be difficult about it the OP is in for an exciting time retaining an attorney. Toyota's money is long.
 
So it went from a ''no start'' to a ''Rod failure'' while in THEIR care?! THEY need to pay for a engine. And no, the lift is legally irrelevant.
 

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