Catastrophic failure of some kind

Sounds like a blown head gasket bent a rod which broke a hole in the block. It happens. If that is the issue you need an engine. I would put a Hybrid Pit Rebuilt Gold in or a JDM used in Japan engine.

I would take it back to the seller. These things don't happen overnight. They progress over months.

Shudder video
“Hey Walt… they want to wait and see if it gets worse…”

 

You're kidding me. You really have no clue?

 

First step:
Depending on how 'just' you bought it - you need to bring this to the attention of the seller.
That's the best 'first step.'

If the paperwork said "As Is-Where Is, No Warranty!" then you may or may not have additional purchase protections.
If "Just bought it" means you bought it a few days ago you may have a valid claim.
If it's been a few weeks or months - then I'd say that the "Change Engine" light probably just came on.

It's like those signs on gravel trucks that say "Not Responsible For Broken Windshields."
It very often depends on how fast you act, the size of the business, and how and how quickly you bring this issue to their attention.

If some barely legal, privately owned gravel truck with mud conveniently smeared in all the right places roars by you at 80mph and your windshield gets sprayed with gravel, then THEY ARE RESPONSIBLE.
If you call the highway patrol later in the week?
You're going to be fixing the glass yourself.

Best of luck!

 

You might want to chase the seller. Gen 3 (and the v) are very prone to head gasket failure, which culminates with such events. For starters check the engine coolant for evidence of a stop-leak product.

 

I'm digging the good outcome.....

Best of luck!!

 

You're getting a rebuilt engine $800. Yep commence not saying anything. SMH

 

I think the concern is the engine may not be rebuilt, perhaps it might be simply used salvage.

A rebuilt on these engines would include new pistons and rings, machine shop rebuilt head, cleaned egr cooler, gasket set etc.

Example
1.8L HYBRID ENGINE 2ZR-FXE REBUILT MOTOR (GOLD PACKAGE)

 

A successful used car flipper has to act like a nice guy - even if he bought the car at auction for $1000, put $1500 into it and sold it for $7500.

I am quite sure you did not get a new battery. Battery guys mix and match used modules to get a battery assembly that functions.

If you are not getting a rebuild engine that includes updated pistons and rings (the early versions were poorly designed on a 2010-2014 Prius) OR it is determined the friend is just swapping in a salvage yard engine (the most common knee jerk reaction and very low cost) it is much better to compromise with a JDM used in Japan engine obtained from a JDM engine importer (distributors in many US cities).

Such as this distributor in Dallas
2010-2015 Toyota Prius Hybrid JDM Engine 2ZR-FXE 1.8L 4 Cylinders – Dallas JDM Motors

A legit rebuild with revised piston and rings is obviously better.

JDM Engine Model Number is
X2ZR-W20 instead of X2ZR-W25

 

Used engine cost $2,000 plus labor to install.

Good luck.

 

Is it me or does that look like fragments of a iron press?

I don't think engines just fragment like that when a head gasket blows. At worst I think major warping.

 

See video in post 2 above. Normally the connecting rod bends slightly and then gives way violently with continued operation.