*update* I also posted on rav4world. Service is complete (no charge). No signs of engine damage, however they replaced the vvti hose with the same part. I informed the rep that the all-metal tube (part #15772-31030) should be used instead. He went on to say that Toyota wouldn't pay for the repair a 2nd time ($40 part with $1200 labor) and that the defective part is considered 3yr 36k normal wear and tear part. :?:
Long story short, if it happens again, I'm effed. Calling Toyota today. Completely unacceptable.