I'm stuck in the same place with the 1CD HU -- I can't pull the stereo out! BTW, this is a stock unit -- no modifications. I was waiting for someone to post results on the installation for 1CD HU, but got impatient...
The blue cable is a thick cable (about a quarter inch thick) and comes right out from behind the HVAC knob. I've taken some photos -- but it's a very tight spot and hard to get good lighting let alone the camera in there!
http://i16.photobucket.com/albums/b11/clothbutt/subaru004.jpg
The blue cable in question comes out from behind the HVAC temperature control knob (lower left hand side of unit, partially obscured by the steering wheel.) The little blue cable you see in this image is not the blue cable in question.
http://photobucket.com/albums/b11/clothbutt/?action=view¤t=subaru012.jpg
Here's a shot from below. You can't clearly see the blue wire in this shot due to bad lighting. No, it's not the purple wire. However, if you look directly left of the vertical purple wire, you'll see a hint of the blue wire.
http://photobucket.com/albums/b11/clothbutt/?action=view¤t=subaru015.jpg
And here's a clearer shot of the blue wire.
Anyone have any idea how to disconnect this thing?