As you have said in your post, under normal operation, water should circulate within the radiator, water body and through the cylinder block. If its coming out the drain pipe, it means that there is a pressure buildup that is making it go the other way round. A possible source of this pressure is a bad head. What happens is that the head face, the part that rests on top of the cylinder block gets uneven and the pressure from the cylinder compression leaks into the water circulating around the cylinder walls, and it is this pressure that pushes water out your drain pipe. Saw the same problem with a 22RE TLC and that required the head to be shaved a little to make it even and then fitted back on with a thicker gasket to keep the cylinder volume the same. The 1KZ is a powerful motor but it has a reputation for getting bad heads. Have a guy check it out and i am sure it will narrow down to this.