You all have been very helpful... I do smell oil and that makes me nervous to not fix the gasket that is dripping oil. I am a graduate student at the university so I don't really have the funds to get a brand new car and reliable used cars are hard to come by. I think that I might just go head with some of the repairs because I tend to trust the mechanic that has been working on my car for the past couple of years.
What I am really concerned with is the suggestion that I will need to replace the driveshaft. I wasn't certain what exactly needed to be fixed, but as Gossgary pointed out, it was in fact a worn u-joint that needs to be replaced. Is this something that occasionally happens? Or is this very rare? A couple of weeks ago, I noticed a rattle sound that I first thought was the CV joint. But, the CV joint (not the boot) was ok and the mechanic diagnosed that the u-joint was bad. Apparently, he doesn't know of anyone in town that he would be able to purchase a used u-joint alone so the entire driveshaft would need to be purchased and that Subaru only sells parts for the entire driveshaft. Does this sound correct? Is it possible to purchase and replace only the bad u-joints or does the entire driveshaft need to be replaced?