I have a blown head gasket in my '97 Outback DOHC 2.5L (Phase I). Apparently, a valve job is needed along with the typical fixings for the head gasket problem. I am thinking of just replacing the engine all together for cost reasons.

 

Can I drop a Phase II '98 or '99 engine in my '97 Outback? Has anyone done this or have any insight to the idea?

The Phase II came out in 99 in the Impreza and 2000 in the Legacy.

 

From what I know, you should be able to drop in the short block without issue.

 

Dropping in the whole engine is another story. It has been done, but there are some quirks.

 

To do it properly, you need to change out the wiring harness. The ECU is different. That's a LOT of work.

 

I know of one guy that did it using the existing ECU. He had to fiddle with things like TPS, cam and crank sensor rings, etc. Bend the power steering lines and so forth. The one thing he was not able to overcome was a constant EGR CEL. The Phase II does not have an EGR. The Phase I does. He rigged up a switch on the ECU power feed and would just reset the thing ever 2 or 3 days when the light would show up.

 

I know this stuff since I was investigating doing exactly this when my 97 OB head gaskets failed 2 years ago at 160k miles.

 

The other route you can go is a rebuilt engine from CCR Inc. They apparently know how to deal with the ills of the Phase I engine (piston slap, HG failure, etc.). You also get a warranty. But it will cost you.

 

A used engine is a crap shoot with these 2.5L if you ask me.

 

Commuter

Is a valve job ABSOLUTELY needed, or is something that the shop would like to along with the head gasket repair? How many miles were on the engine when the head gasket failed? I would would be inclined to spend as little money as possible to keep the Phase I engine going. At this point your car has depreciated substantially. It's a question of economics. Is a head gasket repair alone likely to get you a few more years of use out of your car.

I have not personally dealt with CCR, but they seem to enjoy an excellent reputation among Subaru owners. I would guess the cost total cost for a CCR rebuilt engine replacement would be about $4,000. I have little doubt that CCR would absolutely honor any warranty they supplied with their rebuilt engine. But would you be satisfied with just the warranty miles from your $4,000 rebuilt engine? I sure wouldn't be. Even with a thorough rebuild from a top notch company like CCR can you really be assured of long, trouble-free operation from the Phase I, given the history of the engine? I DON'T know about CCR specifically, but usually if a rebuilt engine fails during the warranty, you'll get a replacement engine from the rebuilder, but re-installation expenses are on you. What I am saying is that purchasing a rebuilt engine involves an element of economic risk. Given a good engine and a good rebuilder, I might take what I would consider to be a small risk. Given a bad engine and even a great rebuilder, I would have to think long and hard about taking what I would see as a considerable risk.

I would run a Subaru with a Phase I engine for as long as I could, for as cheaply as I could. And when it dies, move on. With the Phase I engine, the car is never going to become a classic, anyway.

I think you are better off to sell it for whatever you can and buy an older model with a 2.2L engine.

BUY A NEW ENGINE!! There's a company selling 2.0L twin turbo engs for legacys and imprezas for $1350. say, go for it!