One problem related to water pump has been reported for the 1996 Subaru Legacy. The most recently reported issues are listed below.
Smelling oil for about two months. Finally took vehicle in 6 weeks ago for routine maintenance & discovered oil leaks. Was told by the mechanic leaks camefrom crankshaft or camshaft gasket and cylinders. Contacted dealer replaced crankshaft gaskets/water pump. Another leak in the back of engine caused by separator cover gasket.