One problem related to catalytic convertor has been reported for the 1998 Subaru Outback. The most recently reported issues are listed below.
My Subaru Outback has dripped a little oil from the front ever since I bought the car new and had a burning smell. I took it back 2 times in the first year but they didn't do anything except tell me it was transit paint burning off. I took it back when I was 1000 miles out of my warranty because it was worse and smelled burning more. They told me it was the oil pump seal but wouldn't cover it under warranty. They said if I had been having regular work done through the dealer they might have been able to work something out. Since then it is worse and the burning smell is very bad. I know of 2 other Subaru legacy's with the same problem and a $500 to $700 fix. I was also told by a mechanic that there have been some fires in Subarus due to this problem and dripping on the catalytic convertor.