If you poke around the various international sites you see the same discussions regarding head cracking wether it be the 2LT*, the 1KZTE or the 3L. Only 'light duty' diesel engine I haven't read head cracking complaints about is the 2L. Kind of disheartening.
Maybe its a good thing Toyota didn't bring many diesels to North America or Toyota might just not have the great reliability reputation in NA that they currently thrive on...
That said my 2LTII equipped Surf has put on 30,000 trouble-free km since purchase in 2004 (knock on wood). Almost all of those km were done at speeds <105km/h though if thats an important point (both because my Surf is slow as a Turd and even if it wasn't I'm so used to driving a VW Vanagon that I drive slow as a turd anyway

). Mods I have done are blocked the EGR right when I bought it [July 2004] (since totally removed EGR [July 2006]), put on a 2 1/2" exhaust [Fall 2004 i think], shimmed the wastegate to max the boost to 10psi rather than the factory 7psi [July 2005], and Pyrometer installed [July 2006] (I actually drive the truck harder than I used to now that I have a Pyro telling me temps are OK...might not be a good idea to be putting my trust in a single gauge...).
I actually like my Surf so much I have another one coming from Japan to be my more daily driver while the current one will get a little more built up for camping expeditions (at least thats my plan...when my wife finds out I bought another Surf I might be living in it!!). Here's hoping my new Surf is as great as the current one.
Also as a side thought...even with the cost of redo'ing the engine on a Prado, they still seem like a good buy IF thinking of a specialty vehicle. The relatively unique shape and size of an LJ78, combined with its nice features (ie susp seats, diff lock) makes for a nice platform to make a gnarly 4WD camper. Rip out the rear rows of seats and make some customs cabinets/drawers and a sleeping platform, nice rack up top for the kayak and there you go. Considering 1986-1991 VW Syncro Westfalia's (typically with high km and rust) are commanding prices in the 15-20K range, then add 6-10K for the going diesel conversions people are putting in them or the recurring $2-4K rebuild of the stock (also factory flawed) wasserboxer and you can see the value. As a simple grocery getter...well then maybe a Prado isn't good choice.
And that my friends is a fine example of a run-on post that probably went off topic within the first sentence.....