The mechanic that I took it to was not a toyota dealer (nearest one 75 miles away), but they did provide an initial diagnosis of "internal engine damage", possibly blown head gasket at least. They recommended getting it to a certifed toyota shop. When I called the dealership that I bought it from, the owner said they'd just cancel the deal & return my money. So a bittersweet ending. I don't have the Prius, but I got my money back and the dealer handled all towing expenses.
I am still just puzzled as to how it happened. Dealer had just cheaked all the fluids, my brother checked them before he left, it was only driven about 150 miles from time Igot it til it blew. Lesson learned, will always have used toyota hybrids checked at a dealership before purchasing.