Any reason NOT to do a Gen4 engine swap if there's an engine issue?

Howdy

Apologies if this is an old topic but I'm relatively new to the forum and Prius/car maintenance in general.

I bought a 2014 Prius Plug-In with 136K miles from a used car dealership back in 2021 and barely put 2K miles on it since I got it (I know, big mistake and my fault for not being diligent enough and doing more research on the purchase but I bought it with the Replace Your Ride program in California). Recently, I got some "chocolate milk" coming out of my engine after my last oil change which I'm automatically suspecting as a head gasket issue. The local mechanic that did the oil change said the short block might need to be replaced and quoted me $3K for parts and labor

If I was thinking that if I were to pay $3K to fix a part of the engine, I'd rather just get a "new" engine. My plan was to go to Hybrid Pit in SoCal to get a rebuilt engine. After reading about the Gen4 swaps here, I'm wondering if there's any reason NOT to get a Gen4 engine if I have the opportunity to replace my engine. So far, I understand Hybrid Pit puts a lot of TLC into their rebuilt engines so I know I'm getting a quality product at least. With an imported Gen4 engine, I'm taking a bit of a gamble with any quirks it might come with. Am I missing anything else? I read that I could source an engine from car-part but otherwise I'm unfamiliar with how and where to source an engine. I'm located in SoCal/SGV.

Plans for the car:

• I would like to drive this for at least another ten years
• I don't plan on buying an EV in the near future
  • Looking at Project Lithium in case I do need to replace my battery and hopefully get more electric range if the tech keeps advancing
• Because I bought it through the Replace Your Ride program, I need to keep the car for at least 30 months (30 months is in March 2024) otherwise I would have to pay a prorated amount back to the program if I were to relinquish it earlier.

Some additional details about the car:

• Only 1 previous owner
  • Based on car service history, owner kept up with scheduled maintenance
    • EGR was cleaned in May 2020
• Service note from May 2020
• Issues leading up to "chocolate milk" issue
  • I was able to drive it just fine with no significant coolant loss and no cloudy oil until one day the check engine light was flashing while I was driving on the freeway. The engine shook a bit and then it strangely went away as well as the flashing check engine light. However, I noticed that whenever I slowed down a bit (like say below 40 mph) or rev'd lower, then the shaking would come back until I went above 40 mph. After this event, the engine shook every time the engine turned on and eventually the check engine came back on.
  • The check engine turned out to be a P0301, just like last owner encountered before he gave up on the car the next month. I swapped the ignition coils on cylinder 1 and 3 but I still got a misfire on cylinder 1 for some reason. I did the same with spark plugs 1 and 3 (after putting the coils back) with no change. After swapping out all four spark plugs with new OEM ones, the engine stopped shaking and the check engine light eventually went away.
  • This didn't last too long as I started noticing the oil get more and more milky later on; it didn't seem too bad actually until I got an oil change and saw that a LOT of the oil that came out was basically milkshake So now I've only been using it on very short trips on battery only as to avoid turning on the engine (plug-in part of the Prius coming in clutch )
• Diagnostics
  • I did a block engine test and it came out fine (just a tiny bit of green)
  • Have not done a compression/leak down test or gotten a second opinion.
    • I'm not sure I want to take my car to the used car dealership (about 13 miles away from me) to get a second opinion because I didn't really want to deal with towing if there's a chance that I would need to get engine work done. Also I'm not sure how much it costs to have my car inspected to get that second opinion.

Thanks for reading

 

I get that I'm sort of stuck in a "putting lipstick on a pig" situation with the Gen3 engine but wasn't sure how much better the Gen4 was supposed to be. I just want another 100K miles on a "new" engine with the revised pistons and better head gasket. Hell, I would LOVE to just ride out this Prius for as long as possible but haven't looked if anyone has taken the Gen3/4 to that extreme mileage yet (300K+). I suppose getting JDM Gen3 engine with 50-60K miles might be fine for my 100K miles target.

Damn.

I think the oil consumption was fine; I never needed to add more oil since I brought it home from the dealership (I didn't have any 0W-20 on hand anyway until I bought some for the oil change). Then again, I barely added 2K miles to it with a lot of those miles (maybe half even) being pure electric.

I've been afraid to engage the engine ever since that last oil change. There have been times here and there where I accidentally accelerate too fast and cause the engine to turn on; when it does, I check the oil after I get home and I see the oil is not completely clear but not completely opaque like milkshake either. I thought this was just condensation since I rarely turn on the engine and why I kept driving it after I "fixed" the shaking until it was time to get an oil change where it turned out more of that oil was opaque than what the dipstick showed me. I think I might actually just go to the used car dealership to get it checked out for a second opinion then and just run the engine there and back. I'm sure it wouldn't be too bad and then I can check how bad the oil gets after a longer session on the road.

Overheating? Really? Interesting. I thought the only issue would've been having to reuse the Gen3 EGR and needing to clean it out every so often. If it's not the water pump causing the overheating then that definitely sounds like a potential headache in the future. I'll need to ask Hybrid Pit some questions about this.

I do like figuring out problems...as long as they don't cost me an arm and a leg! I sort of view the car like a computer where I'm choosing the parts and learning how to troubleshoot it as I'm making it my own. I do enjoy the satisfaction of making something "mine" in that way. But I'm also lazy and would like less headaches down the road~

Good to know about the CEL not showing up until something bad happens. I really hope it's not a clogged EGR as I can't imagine it clogging up after 2K miles from the last time it was cleaned. I did read that it's better to change the oil at 5K miles so I'll stick to that. Just want oil prices to come down a bit more