3-20-13 Had an oil change at Toyota.

Standard case of trying to put the blame on someone else. There's nothing anyone can do to cause a head gasket to leak oil, least of all a water pump or anything else that has nothing remotely to do with the head gasket. Would you feel any better about the diagnosis if the warranty had run out at 50,000 miles?

In general, those extended warranties, which are just extremely high-priced insurance contracts, are rarely a good value, especially with cars like Toyotas which are pretty high quality to start with. You paid a high price to take care of a few repairs that might occur. Why not save that money and put it toward some repairs IF they occur? Also, look at how long the original warranty lasted. You can't be far beyond that for years OR mileage so what did an extra warranty cover?

Way too often I overheard at the dealership, "what you need isn't covered". Those contracts are very specific but car owners always get the false impression everything expensive is covered.

First I'd ask how badly that oil is leaking. It's not uncommon to need a new cylinder head gasket on any car by around 100,000 to 150,000 miles so put the repair off if possible until then. Oil is the least likely thing to leak from a head gasket, so you might want to keep an eye on it and hope it's really leaking from the valve cover gasket. That is a much easier and less costly repair that only takes about an hour or two.

Very doubtful. The only thing I can think of is if the coolant is not changed regularly, acids build up from the normal seepage of combustion gases. Antifreeze has corrosion inhibitors and water pump lubricant that wear out in about two years. That's why two years is the common recommendation. Even if that is ignored, water pumps do fail all the time on any car brand and is nothing unusual.

I understand questioning if the two things are related, but in this case I can't think of any way they could be. A corroded head gasket can let oil and coolant mix, either one leak outside the engine, or either one leak into the engine and be burned. Oil is the least likely to leak anywhere. That's why I would want to see it for myself before committing to head gasket.

That won't matter. They won't cover anything that they aren't legally required to and once the contract expires, that is nothing.