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Thanks for the comments.
Just to follow-up on some items, I don't plan on going with their 10k/12k engine options if this doesn't get worked out, as I know that is excessive.
The case with Toyota is recorded with both my name and VIN attached, so a different dealership wouldn't get me anywhere. My dealership seems to be supportive and hasn't tried to rush my car or engine out of their garage, but at the same time I don't think they've actively fought for warranty coverage. I think its worth one final call to the dealership to let them know this isn't going anywhere without their potential assistance and see what they have to say.
When I initially opened the case I know they made it seem like it was a big issue that I didn't have my oil changed at the dealership, stating that I should contact the garage who performed the oil change to get this resolved, even though this wasn't an oil leak issue. I don't think this was the sticking point though, as the supposed engineer had denied the warranty claim already without asking/knowing about the oil change history. In fact, I don't have any proof the engineer even had knowledge of the correct volume of oil being in the engine at the time of failure since he checked the engine out after it had been drained.
I also had two separate Toyota reps. tell me to try and go through my insurance company when this wouldn't come close to comprehensive/collision coverage, so I guess they're just trying to place responsibility anywhere else but Toyota.
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