Thanks for the advice! Dealership did not perform any of the tests you spoke about or look for anything else which might be causing the problem. They simply test drove it and made the diagnosis based upon a clutch pack replacement they had recently performed for another car.
My '97 Outback Sport was diagnosed by the local dealership as needing to have the clutch packs and solenoid, in AWD system, replaced. Wondering what a fair price would be for this repair in Maryland? Any advise is appreciated.