Has he considered a low mileage, used Japanese imported engine? I don't know if he has the 4 cylinder or a 6 cylinder engine but they are a good way to go. These engines generally have between 40-60,000 miles on them. They are tested and come with a 6 month warranty at most places. Below is a link to one. It should be around $1500 to replace it (maybe even less depending on what the shop wants to charge in labor). Anyway here you go:
http://www.naganojapanese.com/engines/Toyota
BTW, there are many distributors throughout the country that do this so if you do a search for used japanese engines in your area, you might find a shop that is selling the engine for less.