Is this even possible? : head gasket leak, no overheat,no codes, see pic....

I don't see any indications of a blown HG either....The rust from bad coolant makes it pretty obvious...

You are right that they are not hydraulic but wrong on everything else.

Exhaust valves get tighter with time as the valve seat sinks in the head. When the clearance goes to zero (or preloaded) it puts a bunch of bunch of heat into the head and valve, causing the valve to burn and the head to crack. This is a fairly common occurrence on the 3rz/2rz. Toyota's maintenance interval is 60k on valve adjustments to prevent damage.

 

A smaller valve clearance will cause the valve to be open slightly longer. The valve only dissapates heat when closed when it's in contact with the head. Normally it might be closed 75% of the time, but with a small clearance it might only be 73%. That small difference allows the valve to remain hotter, and that's what causes a burnt valve.

 

I was just passing on what the service manager at my local Toyota dealer told me about valve adjustments. He said Toyota told them that unless they are ticking don't mess with them. He did say there was a slight chance a valve could wear tight. A friend of mine who was a Toyota mechanic for 20 years said the exact same thing. That the valves wear loose.
Personally, from what I have read with various examples on this forum of cracked heads and tight valves when they "are" checked I am lead to believe that it is best to have them checked regularly.

 

@ DrZ
in the picture of the block just above: top 1/3 of photo,just to right of center there's a water jacket(?) w/clean metal block to the outside edge. If you look at the first pic I posted when I started this thread....that was taken from under the truck looking up at the corner of the engine where head meets block on exhaust side, adjacent to the firewall. Cylinder head 'clean' above block, blackish ooze on block below head. Wish I knew how to digitally mark the photos, it would simplify things!
-and when I made those posts I selected the option for 'thumbnail' sized images ("click to view image full size") because I hate having to scroll down forever through some boring photo in order to read the text but they came out full-size anyways, sorry.
@TRVLR500
I think you are absolutely correct...and my machine shop(s) concur. The guy I talked to at the first shop I called (Car Quest, on the recommendation of several local mechanics) laughed when I gave him the details (make, engine, valve lash issues....) and told me this is typical for these trucks and that I was probably out of luck ....and likely to soon be out of pocket as well. He indicated that there is a common misconception 'out there' about these valves 'wearing loose' and it helps keep his shop in business.
One of my roomies is a tech at Midas and is in close contact with several techs at other local shops. When I asked him to ask around for me about where to get my valves adjusted (I had read the fsm and knew the procedure would require a 'SST' etc etc and it sounded like too much of a hassle...) a couple said these 'never NEED adjusting', a couple said the valves were not adjustable and a couple said they'd never heard of them being adjusted, period. One guy came by the house while I was outside working on it. I explained how it's supposed to be done and he was like, "no way. I wouldn't touch it, not me, unh unh......".
Ye gads, those pictures make it look like maintenance was a foreign concept or somethin'. Ouch.

 

If I'm following correctly you're talking about the larger hole by the corner. That's where the oil drains back down to the pan. There is a similar hole on the other side between cylinders 3 and 4. The clean metal just looks like part of the gasket meant to seal that hole.

It could have been leaking a bit through there, but the oil there isn't under pressure. It just drains by gravity.

About the valve clearances...I guess most mechanics spend most of their time on cars with less than 200k miles, and these valves usually don't go out of spec until after that, so they just never have to deal with it.

If you don't have the special tools you could remove the cams to get to the shims, but that is a bit of work too, especially for the intake cam.