Hey, I've taken my 98 Outback Legacy 8 thousand miles around the US, and in just the past 600 miles a plume of white smoke came out from the hood need the windshield on the drivers side. Not just a puff, but 30-90 seconds of "holy s#!+" It happened once I was driving, the 2nd time my partner was driving.
In both cases, we noticed strange behavior when starting from a complete stop. It felt like the parking break was engaged, and that sensation quickly got worse until the engine was smoking. In both cases we were alone, freaked out, shut the car down, then were able to restart without incident.
I had the clutch replaced about 6 thousand miles ago.
The owners manual does mention the Hill Holder, and that would explain the annoying lurching and "sticky brake" feeling i get when starting from a complete stop. Looking under the brake fluid reservoir, where the manual suggested I found nothing that resembles the diagram (no spring) but maybe it was deeper inside and looked more like what this guy has:
http://www.lackhead.org/2008/09/disabling-my-subarus-hill-holder-clutch/
Still, would that explain the smoke? The Hill Holder is always a little annoying, but why would it occasionally get worse, then magically get better by shutting down and restarting the engine?
It might never happen again, or in another 400 miles i might get my third scare.
Thoughts?