Yes, the bearing you show is worn pretty bad. Can't quite see brass yet, but its close. The cam journals look a little rough. You can mic. it, and compare it to the TSRM here:
http://cygnusx1.net/Supra/Library/TSRM/MK3/manual.aspx?S=EM&P=48 If its within specs, you may be able to smooth them down somewhat. Just make sure they don't become to small.
The ridge I mentioned is at the very top of the cylinder, inside of it. You can see it in the pics. Its the top part of the cylinder that is discolored. If you run your finger up the cylinder, you'll feel a bump at the top. The reason for it is that the rings gradually wear the cylinders up to a certain height, especially when the engine isn't oiling correctly(For instance, its constantly run low on oil, or the oil isn't changed at the correct intervals.). The ridge is where the rings haven't worn the cylinder down. Sometimes they are really bad, and sometimes they're nonexistent, depending on how well the engine was taken care of. Your mechanic can get a ridge reamer, which will cut the ridge out to the same size as the rest of the cylinder.