D0UG

The dealer's service manager referred to varying driving habits as a culprit The service manager is an idiot that wants you to go away. Find another mechanic. Unless you are driving around in first or second gear, that car should be getting 20+ miles per gallon in the city.

I replaced the coil on my 1993 Camry last year. The low resistance indicates some windings are shorted which will result in a weak spark.

The O-ring on the distributor shaft leaks after about 8 years. It is simple to replace.

Most likely (95%) the strut mounts. I just replaced struts on my 99 Avalon. As it turns out, the old struts were not really very bad. Because money is scarce, I did not replace the mounts. Now, it rattles on every bump. Strut mounts are now on the wish list. My experience (21 years) has been that Toyota strut mounts are not very durable. Moog last much longer.

You may want to purge the air out of the cooling system. Squeeze the hoses with the radiator cap off and see if air comes out. If water pump is bad, the heater core will cool off when the heater fan runs a liittle while. Even a new water pump can fail.

You have water leaking into the intake manifold or combustion chamber. A radiator shop can pressurize the radiator and possibly find the leak. It does not sound like a head gasket problem.