One problem related to differential unit has been reported for the 1997 Subaru Outback. The most recently reported issues are listed below.
: the contact stated while driving 45 mph on normal road conditions, the passenger front tire exploded. The aaa provided assistance and replaced the tire with the spare(doughnut). When the vehicle arrived to the residence, the rear differential was on fire. The fire was extinguished with water. The owners manual in page 8-11 indicated in fine print, when the spare doughnut was used a fuse had to be plugged in the fuse box to maintain an emergency light illuminated. The vehicle was taken to the nearest independent mechanic, who determined the fire was due to the differential over heating because the uneven distribution of traction when a smaller size tire was in use. The manufacturer was contacted, and determined the vehicle should be taken to an authorized Subaru dealership to honor the repairs cost.