I didn't see anything on this forum, but a google search seemed to indicate that the knock sensor circuit on older gen Subarus is troublesome.
My 2000 Legacy GT wagon was throwing this code. I inspected the knock sensor and tested it (it measured 1.8 meg resistance; spec is 700 K or higher) and it had no cracks or obvious defects. So I cleaned everything up real good and put it back together.
I did this three times and every time the code came back. Also power was down and mileage was terrible, so there was an obvious problem.
On older gen Subies, the knock sensor grounds to the block through the base of the sensor itself. This is a very bad design for reasons I will not use up bandwidth to explain.
I cut the pigtail open and found that the "ground" terminal from the sensor was wired to a shield. I soldered a length of 16 gauge wire to the wire (right where it attaches to the shield) and grounded this wire to the manifold right where another ground wire attaches. I cleaned up everything real good (sandpaper and electronic parts cleaner) and bolted the ring terminal up with a slathering of anti-corrosion grease on everything. I used a star washer for "bite."
Result is no more code and she runs like she used to. Gas mileage has doubled (it was real bad with a malfunctioning knock sensor).
If you're thinking of reinstalling the sensor with a star washer for "bite", don't do it. The sensor must fit snug against the block to work effectively. Run a dedicated ground wire.
Cost : $0.00 because I have a well stocked electronics shop. If you bough everything it would be around $10.00.