Thanks very much for the comments. If San Francisco weren't tearing up the streets all the time to (pick one) replace sewer line, replace water mains, burying electrical supply lines, putting in new trolly tracks, add wheelchair friendly curbs, etc. the roads might actually be fine. But there are always a ton of steel plates covering some big work hole all the time and they don't do anything to ease the transition from pavement to steel sheet 1 inch higher.
I know 16" rims won't fit with the 350's brakes - already explored that. As for swapping a 250 rims with my 350, I don't think the other party would be all that interested in my chewed up rims (parallel parking rash). So I'm left with aftermarket rim choice (since Lexus wants $2400 for a set of 17" OEM rims). A guy at Tirerack is recommending the following - and I see what you mean about the wider rear tire prices:
Front Tires 225/45r17 Michelin Primacy MXM4 91H $150 each
Rear Tires 245/45r17 Michelin Primacy MXM4 99H $244 each
http://www.tirerack.com/tires/tires.jsp?tireMake=Michelin&tireModel=Primacy+MXM4
I'm not sure what the difference is between the MXV4 and MXM4.
Wheels 17x8 OZ Ultraleggera Bright Silver Finish $263 each
http://www.tirerack.com/wheels/WheelCloseUpServlet?target=wheelCloseUp&wheelMake=O.Z.&wheelModel=Ultraleggera&wheelFinish=Bright+Silver+Paint
They also carry a more conventional OEM-looking rim that's cast in China, and of unknown quality - but they're half the cost of the OZ's. FUD is gripping me hard on that tradeoff.
DBest