sludge?? that's supposed to be covered under an extended warranty!
http://www.autonews.com/article.cms?articleId=38921
"Toyota said it will pay for sludge-related repairs for eight years from the date of purchase for all 1997-2002 Toyota and Lexus vehicles with the 3.0-liter IMZ V-6 engine and all 1997-2001 Toyota vehicles with the now discontinued 5SFE 2.2-liter four-cylinder engine. "
Fight them for it, and take in documentation for your oil changes. And read that whole article, its really interesting. the engine on my 95 avalon siezed due to sludge, and we had to pay 3600 for a 'new' engine with 60,000 miles to be put in. contacted toyota, and they agreed to pay only for half, since the sludge warranty only covers 97-02 models. that's so dumb because the engine design didnt change between 95 and 97, both years still had the faulty designed, but toyota only covered 97 and onwards

. anyways, best of luck.