Hello, I may be new here but I've had my share of dealing with dodgy car dealers. Clunky noise is definately not the thermostat. Thermostats do not make any noise, they just sit there and simply contain a spring. When the engine is cold, the thermostat is closed. When the engine warms up, the spring gets compressed and allows coolant to circulate through the radiator. So I would trust what the Toyota guys are telling you. I also know from experience that a blown head gasket WILL cause overheating as well as other problems. The price to repair seems a bit high but probably makes sense if done at Toyota workshop. I know at least in SA any car sold from dealer is covered with 3 months warranty. If you have a major problem like you describe, they have to fix it. So they will give you all sorts of stupid "fixes" to your problem to get through the 3 month period. If it is less than 3 months you should get on their case fast. Especially if it is engine / transmission issue. If you have a written quote from Toyota, shove that in their face and get them to fix it. I hope you get it sorted the cheap way. Let us know how it works out.