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Swap Engine Or Fixed Valve Stem/head Gasket/rings

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well, we have some major problems brewing from my 98 ES3 w/138K. although I own the car, but my Mom is the primary driver.

initially, it made blue smokes when started up in the morning for about 30-seconds, then exhaust became normal. recently, the blue smoke become constant: rather big puff at starting up, follows by much smaller amount, but it's alway there from pipe.

also, we need to put 1qt engine oil in there just to upkeep the proper level every 7-10 days, and there is no sign of oil leak whatsoever! so, the conclusion is engine oil burning!?

valve stem seals? leaking head gasket? worn piston rings? can't believe those conditions can happen to a 98 lexus with only 138K!

my mechanic said it must be caused by lack of basic maintence by previous owner, such as oil change, low oil level, or low/bad collant, otherwise a lex shouldn't be like this. the sad thing is that we did have the car checked out by dealer about a year ago before we bought it locally, and we've done extensive brake works, TB/pump changed, fade stereo LCD fixed plus 4 new tires. it seems lots of waste to dump the car now!

he also said he can swap the engine with japanese imported, 40k~50k miles, for $2500.

so, I need to decide:

dump the car cheap?

replace valve stem/head gasket/piston rings for about $2k? (if we need to open up engine, we would replacement all those things at one time)

swap engine w/40K~50K mileage for $2.5K?

any advice?

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