Reviving this thread because I had hoped to post an update in here months ago with how I resolved this issue, but unfortunately it remains unresolved.
I located what seems to be a very reputable diesel pump/injector shop here locally (DPI in Houston, TX). They had exceptional reviews, are a Denso service center, and say their guy has been rebuilding Denso mechanical IPs for 30+ years. They seemed more than willing to take on the IP rebuild and answered all my questions and provided a fair quote, so I figured I got lucky and found a legit local shop to do the rebuild rather than sending the pump out.
The truck went to my mechanic (similarly, very well respected Cruiser specialist shop here in Houston) and they pulled the pump. I delivered the pump to DPI and they rebuilt it, then I delivered it back to the mechanic for reinstallation.
The mechanic reported back that since reinstalling the IP, the truck would run very rough and they needed time to further fine tune it. I read the FSM in enough detail to know that there are a lot of possible adjustments to be made on the pump, including its orientation, to get it dialed in, so I let them have the time to tweak it. Eventually they said that they had been making miniscule adjustments to the pump but still could not get the engine to run smoothly. They took it all apart again to confirm timing of the cam and crank, and after putting it all back together have not been able to even get the engine to even crank anymore. They confirmed that diesel is coming out of the injection ports and have been trying to get it tuned in for months now, but with no luck.
I talked again to the rebuild shop to explain the symptoms and they were very helpful offering advice and some things to check, but indicated that it sounds like a timing issue rather than an issue with the rebuild. I know they did bench test and tune the IP after the rebuild, and we've confirmed that the IP is delivering fuel, so I'm inclined to also suspect it's not a rebuild issue. They did offer to take another look at the IP.
Basically at this point my mechanic thinks it's an issue with the rebuild, and the rebuild shop thinks it's an issue with the re-installation of the pump. I'm kind of at a loss for what to do next here and although I understand how the system is supposed to function and have read the FSM sections on it, I'm not really knowledgeable enough on it myself to call out where issue might lie.
Three options I'm currently pondering as next steps:
1. Have the IP sent back to the rebuild shop and ask for them to re-do the bench test and ask to witness it. I didn't get any paperwork from their initial testing of the pump. The FSM gives lots of specs for how the pump should operate post-rebuild. This could uncover an issue but if it was never an issue with the rebuild all along, then it doesn't accomplish anything.
2. Send the truck to another local mechanic for a second opinion/to troubleshoot the installation of the pump or other possible issues with the fuel system. The mechanic that currently has the truck is the only one that's done work on my truck in the past other than me, so I don't have another trusted mechanic locally. I did speak to another shop that specializes in diesel fuel injection locally and they were willing to look at it, but I'm skeptical because they probably have never seen a Toyota diesel.
3. Ship the truck off to someone who's experienced with Toyota diesels. I've heard of some references here on Mud. Obviously this is a costly option.
So... any advice?