So a new pressure switch / sender has been installed and it seems to be holding oil for now.
I had to shampoo the engine bay carefully to clean up the mess, it was brutal under there. I may do it again with the pressure washer on the light "engine cleaning" setting.
Oil sender leaks generally develop slowly over time, starting with seepage of a barely detectable oil film, and gradually increasing to the "drip" stage over a period of months. I have never heard of a sender failing catastrophically with an immediate significant oil leak rate.
Do you habitually check your oil, coolant, and brake fluid levels, and give the engine bay a quick visual check EVERY time you refuel? This is a pretty effective method for detecting problems at the earliest point, before they become potential disasters.
I hate to say this, but even though your engine seems to be running fine, the rod bearings were almost certainly damaged to some extent by running dry, even if only for a few seconds. They undoubtedly were running in an oil-starved condition for some time before they started to audibly knock.
It might be useful to temporarily plumb a conventional oil pressure gauge into the system and determine what the "hot-idle" oil pressure is. That, and if you don't drive in sub-zero weather, use oil no thinner than 10W-30 or 20W-40.
(Toyota recommends oil viscosities as heavy as 20W-50 in the 1GR-FE engine in countries other than the USA, where they don't need to meet the US EPA's fuel-efficiency standards.)
Your third-gear grinding issue may actually be related to the clutch not releasing completely. How many miles on the odo, does the vehicle still have the original clutch and throw-out bearing, and are there any other indications that the clutch might be dragging slightly?
You might try bleeding the clutch hydraulic system first to eliminate any air bubbles that might have gotten into the system, and to purge the old contaminated fluid.
