So... Its been a while since I updated. I had Misfires on #4 all the time, and sometimes on 1 & 3 and some engine squealing. What I was hoping to just be a stretched timing belt and a noisy throw out bearing was actually (almost) the worst it could be...
I had to replace the short block. The crank bearings were wearing which was putting some metal into the mix of problems, and in addition, there was piston damage on #4, causing misfires on that cylinder and the others. I did not even try to find out if the block was repairable, I just went for a new short block because it would give me piece of mind. The only way that it could have been worse would have been if the heads were screwed up, too. Luckily, they weren't because I would have not gotten the car fixed had that been the case.
The repair work was done at EFI Logics up in CT, who are like a jar of awesome sauce. (I called them on the recommendation of Mike P from AZP Installs, who is like two jars of awesome sauce. More on this below.)
It was worth getting the car fixed 100 miles away because as soon as you walk into EFI, you know that all they think about are Subarus. I originally took the car there thinking that the problems were somewhat minor, and when they looked at the car and realized that it was a bigger deal, Chris from EFI called me, asked me a ton of questions about the history of the car (to see if I had bought it used and had been scammed, etc. I let him know I took delivery new with <10 miles.) Then he and Pete laid out my options, costs, put the whole thing in writing, and did the work faster than they promised, which was refreshingly great service.
Regarding Mike at AZP... he deserves your business. When I was trying to figure out what was wrong, he met me late on a Friday night at his shop in NJ to look at the car with one of the other AZP guys. Then, he recommended some inexpensive things to try first before getting the above work done, helped me order parts cheaper than I could get them myself, AND, to top it all off, he would not take money from me when I offered to pay him for his time.
(If there is a place on the forums where I people are most likely to see my feedback about these two businesses, please someone let me know.)
So, the bottom line... about $6400 for everything. That included the short block, all belts, all gaskets, a new clutch kit, an new and upgraded oil pick up, higher quality head bolts, all fluids including three oil changes, spark plugs, and probably some stuff that I am forgetting to list and the labor.) If I include the costs of things that I tried myself to fix before I went to EFI, my total costs are probably in the low $7000 neighborhood, along with a lot of my own time trying to fix stuff myself and and a lot of favors owed to people who were kind enough to drive me around while I had not car for about a month.