GeneralDisorder

It's extremely risky TO split the block. The clearances are not a trifling matter on a split aluminum block. It will not go back together well if you haven't done quite a few of these and know the special tricks. You are 100% more likely to throw a rod bearing if you do split it than if you don't. GD

Sounds like you need to address a clogged up block breather and PCV system. This what you get for running non-synthetic oil and/or not changing it frequently enough. GD

The rubber cover for the bell housing access hole has probably fallen in and is rubbing on the flex plate. GD

Rings (no honing), 10mm oil pump, new gaskets and timing. Run it. GD

What gear oil are you running? Put Subaru HPGO in it. GD

Cometic is ok - but I only use them if I need a special thickness. They are more expensive and less available than the factory gaskets. There is no real difference between 642 and 770 other than some minor cooling port shape differences. They don't matter and either work in every application in my experience. GD

642's were used on early turbo models. 04-06 STi IIRC. So they are not strictly an NA gasket. They do fit the porting on the SOHC heads a little better but we have and continue to use 770's on every engine when the 642's are not available. The porting really makes no difference at all. GD

I never hone any engine except as the final step to an over-bore. If the bores are bad it needs to be oversized or have sleeves installed. Honing will not fix out of round, hourglassed or tapered (or all three) bores. And it isn't required for ring seating. So it serves absolutely no purpose. GD

Don't hone it: http://www.snowvalley.20m.com/bikes/dnthone.htm

I don't recognize it given what you took apart and I've been through these engines hundreds of times. I just finished a 600 HP FXT for the West Coast Subaru Show. My guess would have been injector o-ring given the approximate dimensions but you ruled that out. Maybe it was laying on top of the engine from previous work on the injectors and just fell out when you pulled the engine. GD

We just use 10's on everything unless it's a special build or a dual AVCS engine, then we use 11's. GD

Bad solder joints in the HVAC control panel. Or yeah could be the EVAP temp sensor. That's a dash pull. No Bueno. GD

That's not a rebuild. That's a head gasket replacement. Go ahead on and do it. Just swap the pistons for the 2000 - 2005 SOHC pistons and use the 04-07 STI head gasket. GD

The 95/96-ish ECU's aren't "fussy" at all. If you get into the later 90's ECU's then they want a bunch of extra fuel system sensors, etc. The OBD-II sensors are similar. I think everything is basically the same except throttle position... different ECU connectors. The 20G computer (93-96 JDM WRX, etc) is pin compatible with the 92 ECU except it has reversed cam/crank signals and shares a ground on one of the sensors. Easily correctly. It allows you to use the Enduring Solutions board from the UK which allows real-time tuning. GD

Evoscan works ok. But the 92 computer is painfully slow at live data. Why not just wire in a 95 or 96 ECU or get an EJ20G ECU and run an Enduring Solutions daughter board. GD

Define rebuild. And please explain what is wrong with it currently and what your goals are. GD

$hit rebuild. Get a reman from Subaru. It's both cheaper and better quality. Due to a recall back in the 90's the Subaru dealer reman units for those cars are like $70. GD

PLX makes nice ones and the older version 2 is only $40 now: https://www.plxdevices.com/Kiwi-2-OBD2-Wireless-Bluetooth-Diagnostic-Scanner-p/897346002573.htm GD

What is "VFD" standing for in this case? If other illumination on the same panel works and dims then I would agree it's likely not wiring. I've seen plenty of cracked solder joints on circuit boards - especially ones with buttons and controls. 05-09 Legacy radio/HVAC panels are garbage and prone to this sort of problem. MAP light assemblies also. I would get out my handheld microscope and start looking for cracked joints that I can reflow. GD

Look up both sensor's on rockauto.com and compare the part numbers. They are almost certainly different. GD

I usually pay about $75 for used prop-shafts. Call around. Just get a new Duty-C and the gaskets - it's not expensive. You have a running/driving car - do you really suppose that you can replace it with another running/driving car that doesn't have unknown and possibly debilitating problems for $250? 230k really isn't that high if it's been maintained. One of my loaner cars has 320k and customers routinely comment on how they are surprised that everything works, how much power it has, and how tight the car is. It's a one-owner 1990 Legacy 5MT. I have people offering to buy it all the time. High mileage is usually an indication of excellent maintenance. I've seen plenty of low mileage cars that were mechanically thrashed. I would rather buy something with 300k and a huge stack of records than one with 150k and no maintenance. GD

Any Subaru shop will be able to do a 2.2 swap - provided they can find an engine. Another alternative is to swap the pistons in the 25D to the 251 piston and then use the 255/257 head gasket. Cost is about $3500 for piston swap, skirt knurling, HG's, complete timing, all gaskets and seals, etc. 2.2 swap can come in around $2000 or so if you can find one. It's not my preferred way to fix those cars though. The 251 bottom end or pistons will mate up with the 25D heads nicely and resolves the HG issue. GD

A 10mm pump is a good idea.

Mick's web site is still active: http://www.indysworld.com/vehicles/past/1982-wagon-mtngrizz/mountaingrizzly.html Need to level up on your google-fu. GD

No. That's a 98 ECU so it should be fine. The readiness monitor malfunction is 96 only. GD