New cells don't have to come from Toyota.......or even from the same manufacturer as the originals. There are a few companies that offer complete rebuilds with all new cells......but that may not apply to Gen 1 models. I don't remember seeing any bad reports on rebuilt batteries that are done that way.
Gen 3 did NOT go to 38 modules. Gen 2 modules in a gen 1 case is feasible, but personally, the gen 1 side clamps are different and damage the sides of the outer gen 2 modules. Much better off finding the Gen 1.5 modules used in the factory replacement Gen 1 batteries. remember, you get what you pay for. 38 gen 2 modules (2004-2009), built into a Gen 1 pack, labor of removing/rebuilding/etc for $800? You may just be trading one problem for another. Unless your mechanic is really familiar with rebuilding/testing/balancing/etc on modules, idk ....probably going to reuse the same crappy original corroded harness?