Red Triangle, White Smoke and Cylinder 1,2 and 3 Codes

Hi All,

Car profile: 2004 Prius with 175k miles

On March 11, I was on a short drive on the freeway and heard a rattling sound under the car. After the rattling stopped, I looked in the rear view mirror and saw white smoke, then received the red triangle. I pulled over immediately, waited for 5 mins and started the car. The red triangle did not appear and I drove very slowly for one block and then the RTOD came back. Popped the hood and saw smoke coming from the engine. Anytime after that, when I powered the car up (3 times) , it shook violently under the hood. My mechanic told me that he strongly suspects that it's an internal engine failure. I think the other possibility is the head gasket based on what I've read on PriusChat. He gets misfire codes on cylinders 1, 2 and 3. He tells me that the next step is to perform a compression test on cylinder 1 and then a leak test. He did suggest that this might be a waste of money and wanted me to consider cutting my losses and selling my car as salvage. Do any of you have suggestions/thoughts on what the problem could be or what I should do?

Recent history leading up to this.

Mar '22, due to very heavy rain, water was pooling in the area of the spark plugs. My mechanic replaced spark plugs and coils for 1 & 2.

In Jan '23, the same thing happened and I received a check engine light. Only received a code for cylinder 1 misfire. He found rainwater in cylinder 1, 2 &3 and changed the spark plugs, but not the coils. CEL would not go away. Told to drive it anyway.

Mar 3, '23, Engine would rumble on the first drive of the day and one time it shook harder while driving on city streets. Rainwater flooding again. Codes for misfires for 1, 2 and 3. Mechanic replaced spark plugs 1, 2 & 3. No CEL. On the drive home, the CEL came back. Drove the car for about 1 week with no major problems. Then the fateful drive on March 11 at the beginning of this post.

I would appreciate any thoughts or suggestions.