The long and short of it is this:
Yes, as already said the engine has surely suffered catastrophic failure (at 135,000 miles a Toyota has usually just started its useful life - provided it has been maintained in God-ordained Holy Grail order). It may still be repairable though: and this may cost anything between 1 and 3 grand, depending on what needs to be replaced. A second-hand complete engine will cost something in the region of 2 grand: but bear in mind you are still buying a 2nd hand engine with no or limited warranty. It's better the devil you know that the one you don't!
I'd go for a new engine which might cost some 4 or 5 grand including fitment - or else sell the car as a non-runner and get a new ride!
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