Think I have bad news for you Hoony,,,,,,
Tried to speak with a few old friends/acquaintances this morning,,,,spoke to one very clever current mechanic anyhow.
He agrees too, that the signs you are getting are the first signs of internal sludge formation.
Although he doesn't service any Klugers, He says he has heard of them starting to drop like flies from sludge overload and here is the terrible bit,,,
Apparently Toyota not only know about it!! he reckons it is the subject of a class action against Toyota in the US!! by wait for it,,, by KLUGER OWNERS
I respect this fellow too. not one of your average BS guys.
I can explain why the occasional burst of blue and then clears on cold start ups too.
I will attempt that latter.