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If you have over 100,000 miles this is very common for the oil pump seal and O-ring to leak. These are pressure oil leaks that's why the oil is so excessive. You need to remove the timing belt covers and then the timing belt to gain access to the drive gear and front portion of the oil pump assembly. The small shaft seal and O-ring that goes behind front portion of the oil pump are only about 15 or $20 for the parts from Toyota. While you're in there you may as well replace the crankshaft seal and the cam shaft seal and I always like to put the valve cover gasket on to it makes it easier to replace the cam shaft seal. I do lots of these for this oil leak.
If it is really severe yes it will contaminate the timing belt if you're going to have the timing belt off anyway and it has been a while since it has been done I would just replace it. If you have over 150,000 miles and these are the original bearings for the timing belt you may as well just buy the timing belt kit that comes with the two bearings and the belt that are made by Gates. The absolute correct way to do this job is to remove the oil pan and the entire oil pump housing and replace the gasket between the housing and the front of the block and new silicone sealer on the oil pan. This is a lot more work but it depends on what your ultimate goal is here. 90% of the time is just the seal and O-ring behind the front portion of the oil pump.
Thanks for your help so far..you were right about the seal...It was hard. Replaced the belts, O-ring, and crankshaft seal. Lined up the top cam wheel with the small mark on the engine by using a mirror to look through. Lined up the bottom timing mark at zero. Adjusted the tension pully. Put it all together and started it up. It started right away. I let it idle then heard a loud thump like metal hitting metal. It did it a second time as it was turning off. I opened the spark plugs and used a magnet wand to check the cylinders for anything that could have fallen in. Nothing. checked the timing marks again and it was lining up. I looked up the engine and it is a non-interference model. A mechanic friend suggested removing the valve cover to double check timing alignment with the valves. Then to spin the engine with the starter and the spark plugs out to listen for anything unusual. I'm not sure where to go from here...want to minimize any potential damage. What do you recommend...
Was the noise there before the belt was removed? Take the plugs out and crank the engine over with crankshaft bolt and see it if binds at any point. This is a non interference engine. Timing is going to cause any damage. This may just be a piece of carbon dislodged and hitting the cylinder head.