new head gasket for 06 prius, coolant leak ??? Have U heard of this ??

Hello !

Boy , do I need a hand on this one !! LOL
I already talked it over with the family to get their views.
I want to ask some consumer "experts" now to see what they
would do if they were in my shoes.
I just bought my 2006 Toyota Prius about a year ago in 2009.
It has been treating me LIKE GOLD !!! up to this point.
I am in the northeast region of PA where we have ALL seasons spring,summer, fall, winter. About a month or two ago, the check engine light came on and stayed on along with a big red triangular warning light. I let it go for about a week before calling for help hoping that it would just go away.
I brought the vehicle into my local Toyota dealership so they can diagnose it.They told me that they had 3 or 4 different "codes" coming from the machine when getting the signals from the check engine light. All the codes were related to the cooling system.
They said that they felt that there was "debris" clogging the pathway for the coolant flow throughout the engine. They had recommended a "coolant flush" for the hybrid side as well as the mechanical side.
So I took their advice and I had them perform the coolant flushes.
After leaving the dealership that 1st time, the check engine light came back on the next day. I called the same dealership and explained it to them. They asked me to bring it in again.
SO I brought it to them a 2nd time. They diagnosed it again. They told me they came up with 2 of the SAME "codes" and 1 that was different, but ALL the codes were STILL related to the
cooling system. They explained to me that something was preventing the clear flow of coolant throughout the
engine. And since the thermostat was the only major obstacle, they recommended that I replace it.
Well, I did. And after I left the dealership that 2nd time, I was praying that this was the last of my Prius issues !
And what do you think happened to me the VERY NEXT day ?
Yes, YOU GUESSED IT !! The check engine light came back on the next day.
I got on the phone with the same service person who helped me originally. They invited me back and did not charge me this time because it was the same issue.
I told them that I am not in the business of randomly changing parts on my car unless I am absolutely sure I know exactly what the problem is.
HOWEVER, this time they kept my vehicle for a good week or two. Running it through various
diagnostics tests overnight here and there.
They finally came out and said that they feel that I have a coolant system leak coming from my
engine and that I need to replace my head gasket which is responsible for sealing the engine.
They said this repair would cost over $1000.00

I told them I need to think about it before I go ahead and take their word for it that this would be the end
of my worries.

I called around at different mechanics and dealerships to get different prices since this is a mechanical repair vs a hybrid
repair. All the mechanics and Toyota dealerships came close to $1000.00 but they told me that I should leave that type of
a repair to the dealership since they are highly skilled and it comes with 12 month warranty.

I told my family and they said this: " If you brought it to them 3 times and they cannot pinpoint the exact problem, especially for a dealership, you don't need to spent the money for the repair. You should sell the car and get a better one. I would not have brought it back to them after the 1st visit. But you can do what ever you want. Its your call. "

Wouldn't it be less expensive if I replaced the engine ??
I have seen them online for under 1000.00

So what would you do ?