From the start you had oil leaks and consumption, valve issues, and now a bad HG, something went south had to be bad from the start with the machining you had done locally and/or with the assembly, it can't all be the parts, if it is, you would have to be the least lucky guy on the planet, well at least the least lucky Toyota owner on the planet.
OIL LEAKS: My oil leaks were at the input shaft on the tranny – I installed the oil seal backwards! There was a slight coolant leak at one of the rubber hoses on the Idle Control Valve. Later, I had a coolant leak at the heater hose to block. No crankcase oil leaks.
On the valves: Something didn’t sound right from the moment I fired the engine. There was knock that was not right, so I had concerns from the beginning about the head. The valve lash kept going tight at low mileage. That concerned me and seemed abnormal.
The head gasket: The rocker cover gasket kit was junk, so if the head gasket has failued, I’m not totally surprised. So, is the head gasket junk too? Does the head have some issues that would cause a head gasket failure? I torqued the new head bolts per Tod at engnbldr.
The block and machine work: I made a mistake by trusting the machine work. I should have made the shop show me EXACTLY what was done, all specifications, tolerances, and measurements - including the boring and honing, and especially the RA on the hone. My local machine shop has a good local reputation (been in business for 52 years!) and builds race engines and RV engines. I toured the shop so I felt I had chosen a high quality shop to do the basic machine work on the block (.020” overbore, .006” on clean and deck) including magnaflux, sonic test, and everything balanced. They had the timing cover, pistons, rods & bushings, crank, pressure plate & fly wheel.
My bad luck: Yep, I’d say that I had more bad luck than I deserved.
I won’t really know anything for sure until the engine is disassembled and inspected.