I have a 96 OB 2.2 5mt (cable linkage) that has a bad center dif. I'm going to be replacing the transmission.I was just at a junk yard and there are 2 OB with hydralic linkage manual trans, a 97 OB and a 98 OB. Can I use a hydraulic type trans and swap parts to make it stay cable type.

Swap the center diff - no need to drop the transmission, save yourself a bunch of work.  It's just the rear extension housing that needs to come off/get swapped.

 

And - I'd rather keep the known good trans. subaru manuals are decent enough but they can have warn synchro's and input shaft bearings and input shaft seals...best to keep yours if it's known good.

I'm not certain how good my transmission is. The shifter is tight, but I get grinding going into reverse. The bigger problem is recently I had a clutch put in and a couple days later I was smelling something burning. I checked the fluids and the nothing was touching the tranny dipstick. So I added some and still nothing, I ended up putting a quart of gl5 80-90 gear oil in to bring it up to full. I was hearing some scraping grinding noise when coming to a stop. Also at low speeds, when turning into a parking space, I would get little jerking on the steering wheel like when an auto trans would do with a bad duty c. I called the guy who put the clutch in and he said it must have already been bad.

 

Do you think I should just change the center dif and change the gear oil it would be ok?