One problem related to engine failure has been reported for the 1998 Subaru Outback. The most recently reported issues are listed below.
Catastrophic failure of a major engine component which is considerably outside the expected statistical failure rate(based on my research of complaints by other purchasers of this model Subaru automobile), resulting in significant costs to repair. At approximately 56000 miles the head gaskets on my 1998 Subaru Outback with the 2. 5l engine failed. The cost to repair was $ 1880. 00. I contacted Subaru in an effort to get them to absorb at least part of the cost since the car was well within the mileage warranty period, but was slightly outside the time warranty. Their response was sorry tough luck. I indicated to Subaru that a component of this nature with such a high failure rate, was obviously due to a significant design or manufacturing defect. Their response was, again, they were not goint to do anything about it. Someone needs to put pressure on Subaru to make this a recall item.