Three problems related to engine failure have been reported for the 1996 Subaru Legacy. The most recently reported issues are listed below.
4 incidents engine failure. First time I pushed accelator and there was no power. Continued to apply gas pedal and no power, it was as if I was not applying the gas at all. Chech engine light began to flash, car began to shake, and as soon as check engine stopped blinking and light remained on, the car ran smoothly. The second incident was exactly the same as the first. The third incident the car did the same exact thing but this time it stalled out as well. 4th time was very much like the first two. Have been to the dealer 3 times and they have absolutely no idea what the problem is.
Engine failed , loud knocking at engine startup. Subaru replaced entire engine short-block at 18k miles. Replacement engine failed at 19k miles operation with same problem (or 37k miles on car). Subaru claims it is a piston related problem. After many complaints to Subaru, they have agreed to repair it. Currently at the dealer getting new: pistons, pins, rods and bearings as needed. This is a wide spread problem that Subaru is now telling dealers and owners "it is a normal operating noise if the noise goes away after 5 minutes of operation". It is not normal ! and in my opinion will only get worse if not repaired. I plan to sell my car after repaired.
Engine failed causing noise during startup in cold weather.