Hubby is a bank courier - 500 highway miles each week day - dropped a used engine (had about 17 K on it) in his 2003 Highlander about 3 years ago (at 224 K on the truck). Head gasket started leaking at about 605 K on the truck (no overheating - just smelled sweet, gurgled). Reliable mechanic replaced head gasket this week - started smelling sweet & gurgling again after about 100 miles.

Mechanic says it may be the threads on the aluminum engine block have gone soft & are allowing leakage. This has been a great truck & we do not want to give it up. The mechanic went on & on about how smooth the cylinder walls were (apparently there is usually a ring or groove at the top - not the case with this engine) - hubby has used Lucas Oil Stabilizer religiously & has changed his own oil every 5K. Well maintained vehicle, all in all.
Mechanic has offered to give us half the bill back (after the machine shop work) - the refund would be a little over $600. We took it to be repaired in good faith, he repaired it in good faith. It's just a situation he has not seen before.
Any ideas? Any experience in this area? If we have to give this one up, does it have any value? Part it out? (Original tranny lasted till 495 K) Try to trade it at a desperate dealer? Is it even worth anything?
Thanks for your insights.