DON'T BUY A SUBARU, THE COMPANY DOES NOT STAND BEHIND THEIR CARS.

You're not alone. And while they may have changed the engine after 1998, they did did not resolve the problem.

You can look at a Subaru as a gamble. Some turn out well, others not so well despite maintenance efforts. Probably some Subaru dealers and servicers are good, while others not so good. Dealing with the company is extremely difficult for both the car owners and dealers from various things I've heard.

I know of a similar nightmarish experience and if I wanted to gamble would choose a comfortable casino where at least there are known rules.

For cars, there are automobile manufacturers who repeatedly earn their customers' respect.

I am a Subaru Factory Trained and ASE MASTER Certified Technician. I can say with absolute certainty that Subaru builds a very reliable vehicle and they go out of their way to satisfy each and every customer to hopefully retain them as a Subaru owner.
If certain people on this website did their research they would find out that if you simply call Subaru Of America directly and explain your problem to them and let them know that you are not satisfied; in most cases they do whatever they can to make sure you as a customer and consumer are a satisfied Subaru owner. Weather it be paying 100% of parts and labor, Paying for parts, Paying for the labor or splitting 50/50 with the customer.
I have seen Subaru do this as a good will gesture dozens of times. I have even seen them pay for a new engine for a customer that had no record history of oil changes/services!
I have worked for not only Subaru but Mazda, Volvo, Mercedes-Benz, Honda & Acura and Subaru by far does more for their customers than any other car manufacture I have seen or worked for.
I am tired of seeing people on the internet throwing around information when they know nothing about the subject they are talking about. First off; RedRock, if you did "blow" your head-gasket, then that is not a manufacture design flaw ."blowing" your head-gasket refers to the metal sealing ring around the piston cylinder developing a crack due to excess temperature.
Causes being: Stuck Closed Thermostat, Coolant Loss, Etc... all of which happen due to age, mileage, lack of maintence, ignoring a leak,etc... NOT a manufacture flaw.
The issue the Subaru 2.5 N/A engines have has to do with the cylinder head gasket leaking externally at the bottom of the cylinder head where the cylinder-head oil drain passage is located to allow the engine oil to drain back into the engine oil pan. When this happens there is usually only slight residue and in worst cases slow drips of engine oil. TO WHICH WOULD NOT LEAVE YOU STRANDED 500 MILES FROM HOME AS LONG AS YOU KEEP UP ON YOUR OIL CHANGES!!!! I HAVE NEVER SEEN A CUSTOMER STRANDED DUE TO EXTERNALLY LEAKING SUBARU HEAD GASKETS
So if you were stranded and did "blow" your headgasket then that in NO way is Subaru's fault!!!!!!!
"BLOWN" AND "EXTERNALLY LEAKING" ARE COMPLETELY 1000% DIFFERENT!
So if ANYONE is going to try and SLANDER a Reputable company such as Subaru, Get your Terminology and Information Correct! All your doing is throwing around false information and scaring away Subaru current and future owners due to your ignorance.
Secondly, the average joe does not understand the extremes an engine is forced to endure. Say for example you go 100,000 miles and your head-gaskets start to leak, ok well each individual part of the engine is subjected to EXTREME temperatures anywhere from 200-1000+ degrees fahrenheit! So lets say you go 100,000 miles and lets say that you do all highway miles and average 60mph (which no one does all highway miles and city driving will greatly increase the ammount of time on the road!) That 60Mph average over 100,000 miles turns into 1666 hours of use which is 69.44 days equivelent to 2 months and 9 days of continuous use at 200-1000+ degrees of temperature exposure to gaskets that are only several very thin layers of metal and a bonding material.
To get any material, especially a thin layer gasket to last that long is a scientific feat in itself!
PEOPLE, PEOPLE, PEOPLE, vehicles are NOT and investment, they are an EXPENSE, they require regular care and maintence. Put crappy corner store gasoline in your tank and dont expect your engine to last 200,000+ miles. Dont change all your fluids, dont expect your engine, transmission, power steering, differential, etc... to last 200,000 miles.
If you cannot afford to maintain the vehicle you want dont buy it! If you dont want to maintain your vehicle dont Slander the manufacture when in truth it is the CONSUMERS FAULT!

LADIES AND GENTLEMEN ALL I AM ASKING IS PLEASE PLEASE PLEASE DO YOUR RESEARCH AND GET ALL YOUR INFORMATION CORRECT BEFORE YOU GO OUT THROWING YOUR OPINION.

SubieTech's response is full of data that might appear to some to prove a self-serving case but it actually demonstrates little.

Seems SubieTech may be doing to good customers what he wrongly may be accusing them to be doing.

Does not make me feel any better about the company that trained SubieTech or the company SubieTech has defedned. In fact it has the opposite result.

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"just a consumer" how about learning to spell so your post makes sense.. "defedned"? secondly, redrock's claims that his 1998 outback has the issue on the net about externally leaking headgaskets. well, all 1998 outbacks are dual overhead cam engines and only single overhead engines have the issues with externally leaking headgaskets! so his vehicle does not even apply to the issue he is reading about on the net. completely different headgasket!
So tell me "just a consumer" and please try and form some complete sentences that make sense of what training and certifications you have to be able to tell me how i am doing my job?

The engine does have a design flaw. And it is a lottery with Subaru 2.5L. Some people win some loose, in lottery 99% loose which usually the case with Subaru engines. I would suggest to ignore subietech because Internet is at your finger tips where you can find lots of people complaining about the very same issue here with perfect car maintance. The only reason Subaru is paying partly for some customers repairs is because they are afraid of a class action law suit against their faulty engine design. Leaking head gaskets are a serious issue and major problem. This design flaw of the Subaru EJ25 engine is well known and many articles were written about it. Subaru claims tonnage fixed the issue for model year 2005 sadly reports of leaking head gaskets are still coming in for MY2005 and later models. The engine desin is carried over into 2010.

I tried contacting Subaru of America. They aren't doing squat about it. Altho I am the 4rth owner of my Legacy, and there was no warranty. But that's besides the point, have you looked at the exhaust design? "Cruel joke," was Sport Compact Car's image comment on the caption on the picture of the exhaust system they removed. The kink at the collector (y-pipe), is at best 90 degrees, or completely opposite directions (180 degrees) at worst as it curves. That's horrible air flow!

It's like as if they were designed to fail within 5 years. Everything else was a distraction. Battery acid? That doesn't explain the passenger side gasket failures.

I would dismiss the exhaust design as a conspiracy theory, and I've tried, but when I shopped around junkyards for a replacement engine, and even opted for the H-6 3.0, it had the same grease and grime leaking out of everywhere. The junkyard guy claimed all his engines were pressure tested, yeah right. That one was for sure pressure tested, it failed! All of his other engines v-6's and I-4's had no grease or grime tho. Just the Subaru one.

So when I decided I needed custom headers, or aftermarket, and tried searching for them online, I couldn't find any that had headers included. Just the pipes leading to the tailpipe. Where were the headers? I searched and searched, and even went to the dealership site to look at their prices. The pictures of the aftermarket full exhaust systems didn't even have a picture of the connecting headers that would link to the rest of the piping.

It turns out that there are no headers! When I looked at the leaky 3.0 engine at the junkyard, the exhaust port is just one ovalish hole where 3 separate pipes are supposed to be! Instead of a y-pipe air crunch, they decided to do the crunch at the engine. And the passenger side where the spark plugs were had the fine layer of dusty sticky oil residue. Looked like my 2.5 sitting in my Legacy. It's the 4th engine at least, by the way. 3 of them under my ownership. Tho mine was leaking on both sides. My Swiss cheese gasket had oil, gas, water, and air mixing together in this nice sticky goo.

But I had a steam engine, that got me 40 miles to the gallon, while it lasted! I just had to "fill up" my radiator everytime I turned on the ignition to go drive. 50 miles to the gallon, if it was night time highway driving in the winter.

My recommendation? Try to get an engine with no gasket at all. That is the weakest point in the engine. Otherwise, get aftermarket exhaust, one that flows and causes no backpressure, and by exhaust I mean, headers. You'd be better off with no exhaust system at all, except for rocks and dust getting up into your engine. So just saw off the system right before the y- pipe.

Tell your smog guy, that he should have diagnosed the problem for you the first time. That the exhaust design fails inspection from the plant, or from the drawing board. Subaru wouldn't do this to the STi or WRX, or higher models or turbos. Audi certainly wouldn't do this, and I don't think Mitsubishi is shady like that. The 2005 Legacy has two independent exhausts, and they threw in the twin turbo to distract you.

As soon as the cars started looking good, the corporation needed something to make customers buy their new uglier models. They thought they could bank on their all wheel drive platform, if customers could falsely link off-road, with durability, and longevity.

Since there are no other lower priced all wheel drive corporations, they've had no need to improve their designs, and hired a bunch of press secretaries to handle the warranty issues.

Disclaimer: these neglect issues are only for the lower models. Pay them good money, and they wouldn't do that to you. Otherwise it wouldn't sell at all. Audi wouldn't do that, Bugatti, and Lambo wouldn't do that.

They prey on the poor, not really, but they just want some extra cash on the side, give their mechanics and others some work, and get the parts economy some activity. And also move inventory, so there'd be more cars off the street, so more new models can get on.

Seriously if they still have the same exhaust design on the 2010 models...... They do have a diesel engine on the way.

So it is true, it is not a gasket problem, it is not an engine problem, it is an exhaust problem.

Still to be safe, get the 2004 engine, or get the improved gasket, as well as throwing out that y-pipe.

Don't just look under the hood! Look under the car!

If oil is leaking everywhere, by pass valve, gaskets, spark plugs, oil filter, and coolant is also leaking, it must be an overall pressure problem. Probably a backpressure problem.

If oil is only leaking at one spot, fix it. Then wait for oil to start leaking somewhere else. Fix that, then wait for it, or something else like coolant to start leaking somewhere else. Wait for your hoses to start cracking. Gee it must be your fault. Do what I did, get a new engine, and wait for that to fail, then get another engine with the same "faulty gasket" and wait for that to fail.

Notice the sound of an engine? You can tell if it is a Subaru, it has that familiar "knocking" sound. Kind of like a VW back in the day, they're both horizontally opposed too.

I will be purchasing my 5th engine hopefully soon, but not before I get my WRX aftermarket headers, and I am not turboing the car. You'd be better off getting the turbo engine, and turbo headers, but forget the turbo itself. I'm sure the turbo engine has a better gasket. The 2.0 engine from before was a closed deck design I heard, no gasket at all I believe!

Why they decided to start using gaskets, especially when they increased the engine size, just sounds like they wanted to deter guys from buying lower models and fixing up their cars themselves, or punish them for doing so.

But I'm a conspiracy theorist. I get paid to figure these things out. I don't get paid in cash tho, and I don't get paid by just anybody. I get paid by God, or nature, or by the Force. (I mean, dark matter is just the same material as the emperor's new clothes. -- 4 u space theorists)