I have a 1991 Legacy L, automatic which has recently begun to smoke coming from somewhere in the engine. I can see it coming through the grill at night and it does smell. It is worse when the engine is under pressure. When I got stuck in the snow, there were drops of yellow fluid on the ground. It wasnt motor oil, power steering fluid or radiator fluid. I checked the transmission dipstick and it was that color yellow. I think it is dripping on the exhaust causing the smoke. Also, there is a squeeking sound which you can only hear when car is idle. It sounds just like the power steering pump when the bearings start to go.
Question is, is there some sort of bearing that is tied in with the transmission and if so, is it an easy fix? I ask because it is an old car and am considering either fixing it or looking for a new one.