Thanks for all the replies. The car is under warranty and has been in the shop 5 times since June to address this issue. The dealer first found that the system had to much freon causing too high of head pressure. They redid the charge and this didn't help. They then tried a new expansion valve again no help. Their tec stated the compressor had a problem that prevented it from operating correctly and would not put out anything under 60 deg air. They then ordered a new compressor , took from mid July to mid September to get the compressor and then after installing it the dealer said everything is OK. The same problem I started with still exists. No colder than 60 deg air no matter what the outside temp is. When you have the air on you can feel the cold air start then warm air blows then cold again. I don't detect the compressor cycling (never did) but I may not be hearing it. It is as if something is shutting off the cold air flow like a vent door closing and then re-opening controled by some thermostat type of control. Bottom line is that now the Subaru rep is to look at the car some time in the near future. I suspect he will say it's working as designed. If so, then the air in the 2008 outback is marginal at best in Arizona at 115 deg outside temp.
My real question for the forum was if anyone else has seen this on a 2008 outback. Thanks again for all your help. Sorry for the long reply.
John