Sludge isn't going to come out when you flush it. The only way you're going to see is if you pull the plastic caps off and I don't recommend doing that. What you're most likely to find is the grey sludge blocking at least some of the radiator.
Since I've owned the truck, Toyota has flushed out the system 3 or 4 times. Largely because of a mistake where they put the wrong coolent in and I made them fix it. I've also flushed it myself several times. I later pulled my radiator and had it professionally flushed by a radiator shop and none of this flushing did much to the sludge. It was only after I took off the plastic caps that I saw how bad it was. In my case, it wasn't extreme, but enough to affect cooling somewhat.
Here's a picture of one part of the radiator with the plastic cap off. You can clearly see that some of the radiator looks perfectly fine, which is misleading, then there's where a good chunk of it is totally blocked by the sludge. Bear in mind, this is "after" multiple flushings by various people. And...the rig only had about 100K miles on it and was only 13 years old at the time.
http://www.brian894x4.com/images/FZJ80coolingprojectx003.jpg
So right there, about 1/4 of the radiator was rendered useless and I didn't even show pictures of the sludge that had collected on the other side and on the bottom.
Another way to tell is to take a really, really good look inside your radiator cap. It tends to collect in a low pressure area on top of the fins to the left of the cap as you're looking at the radiator from the front. If it's bad enough, you should see it collecting there. You could also reach inside the cap and brush something around in that low pressure area to see if you pick anything up.
If all else fails, this is where I'd start looking. I personally think this is more common that people realize, but as for the cause, that's a long standing debate on here. This has been seen on rigs that get regular maintenance and used only Toyota red coolent. In my case, I know the POs didn't likely maintain the coolent very well and appear to have used green coolent since the early days.