If the previous owners didn't do regular OCI
it probably is sludge as the tercel hold 3.5 qts of oil so long OCIs with probably low oil levels like 2.5 qts will sludge an otherwise ok motor.
My daughter has done the same with a 1990 tercel.
They do respond well to an ARX, HDEOs ( in MN you might be stuck with just 5-40 shell rotella t syn but I use Delo 15-40 Havoline 5-20 mixes . If you've had the cover off clean it up and use a new gasket as they usually leak. Old ones - change all the hoses and the heater hoses. Look over the bypass hoses in particular.
Carb version take a look at the fuel pump for oil leak there and also on the distributor both at the base for leaks.
If the oil is neglected do the diff and trannie. I also recommend doing the pcv, its hose , its grommet and clean the egr valve .
The arx helps the ring packs and the tercels can benefit from techron as well for carbon build up particularly the exhaust valves.
And despite prior neglect its a pretty tough but fairly dirty running motor.
