2000 Toyota 4Runner Code P0301

I own a 2000 Toyota 4Runner with a 4 cylinder inline engine.
The yellow check engine light came on about a week ago, and I took the vehicle to a Toyota dealership. According to them, the exhaust valve for cylinder #1 has zero clearance and it's misfiring, but the recommended clearance is .10. They want to replace all the valves at a cost of $2,500. The truck has 120,00 miles on it.Is their diagnosis accurate, and how can they verify the valve clearance without being able to adjust it to the proper clearance? This sounds fishy to me; what do you think? Thanks.
First thing is take it to a shop and get the compression tested
if # 1 is low get a wet and dry measurements to see if its the valve or rings
if its the valve have them recalibrate to specs
A P0301 is a misfire code which means it could be any of the following problems
Compression,
spark plugs ,
coil,
plug cables,
Injectors
and many more parts that could give you this code .
Indy