Looks good to me!

There is a little I do different, but to each, their own.
I always drain the oil when I start, with the engine hot, but I have plenty of air compressor so can blow debris away. I pour a qt of ATF in before finishing to wash anything else out, and then about 1/2 qt of oil.
When cleaning threads, take an old head bolt (you almost always have to replace two due to pitting anyway - see pics below), and cut a "V" up the threads with a hacksaw (see pics below). Use that bolt to chase all of the head bolt holes, and do it numerous times until the holes are very clean!
Do not use a regular tap, as it will remove metal! Thoroughly clean all head bolts, especially under the head where it contacts the rocker towers.
Note: Our head bolts are
not torque to yield, and
do not need to be replaced every time, but do need to be examined closely for pitting and replace as necessary (unlike the 3VZE engine I'm working on now).
I always use an anti/never seize compound on the threads and under the bolt head. For those of you nay-sayers who claim that it alters the torque results, many of us "overtorque" the head bolts anyway, some going as high as 100 ft.lbs. (Teranfirbt

)
Edit (02/18/09): For the very first time, I re-torqued a head last weekend.
Blind Studios and I were quite surprised that going through one at a time, in torquing sequence, I loosened each one about 1/6 of a turn just to ensure that it would move, and then turned each on almost 1/4 turn to re-torque them to the rebuilders recommended 65 ft.lbs.
For those of you who do not back off the adjusters, as you are torquing the head down, you are fighting valve spring pressure. This diminishes the actual torque (compression) that is being applied to the head gasket.
The other issue, as
shonuff mentioned to me, is catching one and damaging it, the valve, and/or rocker arm.
If you have plastic chain guides (Heaven forbid!), be very careful when trying to compress the chain tensioner with a pry bar, as you may accidentally crack a guide. It is possible to compress just by prying up on the cam sprocket (carefully - some are cast and will shatter).
Oh! And I have done this on a warm (read
HOT) engine with no negative effects. Just be very careful to back the head bolts off in reverse torque order, and do so in very slight increments!
I have also done this with heavily coolant contaminated oil, and just done an oil change again immediately after running the engine up to operating temp after completing the repair, and after running a qt of ATF through with the oil.
I will add this warning though:
Coolant can damage the babbit on the bearings, although does not seem to affect factory Toyota bearings (it will destroy Ford bearings). If so, it will result in a spun bearing, so beware - if bearings have been replaced with aftermarket bearings, all bets are off!
Heavily pitted bolt shank

Heavily pitted bolt threads

Groove cut at an angle for thread cleaning

Another view of the groove cut at an angle for thread cleaning

It works very well, and comes free of charge (after you buy new bolts of course)!