One problem related to differential unit has been reported for the 1998 Subaru Outback. The most recently reported issues are listed below.
1998 Subaru legacy Outback wagon automatic transmission 86,000 miles. Purchased used many years ago with about 10,000 miles. My sister's car, she was driving alone. Experienced driver. About two months ago she came around a corner on a 30 mph road near her home. Light snow on the ground (amherst, massachusetts) she could not control the car, and it slid around. She phoned me and was very upset at losing control. Commented that the car had not felt quite right. I suggested loose lug nuts, badly inflated (almost new) tires, bent rim, defective tire, alignment. All checked out fine. Then I mentioned suspension. She took it to her mechanic who replaced both rear struts. Car still unpredictable. Returned to mechanic who then test drove car and decided that it was a problem similar to that of his parents' similar car: power was not being proportioned properly to the four wheels. He replaced existing transmission / transaxle / differential lubricant with some more specialized lubricant. (amalie ama 1607881297 dextron lll atf) at this time my sister is trying this out to see if it does the trick. Since this defect affects the safety of the vehicle I thought that you should know. I drove older 4wd audis, owned military 4wd trucks, and cars with limited slip differentials. I was always aware of the need for specific lubricants. I do not think that the average car owner should be. Was there a secret advisory or recall?.