Sludgy deposits in the engine oil usually occur as a result of one or more factors--long intervals between oil changes, and/or insufficient ventilation of the engine crankcase fumes. Once a little sludging occurs, it tends to restrict the vapor flow through the ventilation passages and promotes more rapid sludge build-up along with higher crankcase vapor pressure which results in increased oil consumption, increased oil leakage, and increased likelihood of visible smoke in the exhaust.
If the breathing passages in the valve covers have begun to be restricted, then you can often get a significant benefit from replacing the valve covers. For a number of vehicles, Toyota has come out with redesigned/updated valve covers and PCV (positive crankcase ventilation) valves to counter this tendency to sludge. On vehicles that have plugged up venting passages, we've seen dramatic reductions in oil consumption and visible smoke from oil burning when we've installed the needed new parts. Even when Toyota hasn't updated the covers, if the covers have plugged passages, then the same benefits apply.
While doing the above repair, you should be aware of the possibility that bits of sludge will be dislodged and migrate down to the oil pan where they can plug up the screen at the oil pick-up tube for the oil pump. If this happens, then the engine pan has to be removed and the pick-up tube/screen assembly has to be replaced.
Regarding the sludge that as accumulated in the engine (other that the sludge in the valve cover breathing passages) once the sludge is in place, I'm not aware of a safe and reliable way to remove it short of performing a complete disassembly of the engine. I'm not comfortable trying to flush it out, as the dislodged sludge is far to likely to end up plugging up the screen at the oil pick-up tube for the oil pump and starve the engine for oil. So, unless you plan on doing an engine overhaul, it seems to me that a "let sleeping dogs lie" policy is the safest course of action with regards to addressing sludge that has already accumulated in the engine. The valve cover replacement mentioned above is intended to reduce oil burning and stop further build-up of sludge.
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