My 1990 Legacy LS  wagon  with 176K miles has recently started overheating.  I changed the thermostat, flushed the radiator, bled the cooling system and ran a compression check (all cylinders have a PSI right around 170).  It doesn't overheat when idling, but overheats (close to red) within a few minutes after driving.  It seems to start overheating once I am above 35 MPH.  The water pump isn't making any noise and I don't see a coolant leak and there is no coolant in the oil.  I have only had the car for a couple years and don't have any kind of maintenance history on it.  I am out of ideas and any suggestion would be welcome. 

#1 test.  Check for continuous bubbles in the coolant - radiator cap open, or in the recovery tank.  Make sure the system is full, start with the engine cold.  Let it idle at least until it starts to get warmed up.  OR until you see continuous bubbles.  IF you see continuous bubbles, the head gasket/s is/are blown.  The most common head gasket failure in Subarus is compression into coolant system.  Once there is enough air in the system, it can't cool, and causes overheat.

 

Do the fan/s run when it start to get over normal temp?

If your systems is not showing signs of always having air in the coolant, something else is wrong.
IS the air path through the radiator clean & clear? 

Inspect the tiny fins that are between the tubes.  Are they all still there and solidly attached to the tubes?

Flushing does not test the flow of the coolant path.  How I have checked that is block the lower hose.  Fill with water.  Remove block quickly.  The water should just gush out fast like it was all coming from 1 solid tank.

I'll check for the bubbles in the morning and check the flow as you suggested. The fan does come on when it comes up to normal temp. Is it still possible to have a blown head gasket if I am getting compression readings of 170PSI on all four cylinders? 

HG doesn't affect comp or leak down test.

Don't know if it's the same issue, but my 94 Liberty was constantly overheating and it turned out that the heater core was blocked. The heater is used as a bypass and there wasn't enough coolant flow through it. It was fixed by bypassing the heater core with a T in the inlet and outlet hoses of the core, and a short hose to join the Tees. There's still enough flow through the heater core to provide some heat and the overheating hasn't reoccurred for 20K+ km...

The blown headgasket can be anything from a tiny pinhole, that makes a small bubble every few seconds - which is the only symptom. to very blown, where it could effect a compression test.

 

I have also seen pinhole leaks in radiator s, or slightly loose hoses that let coolant seep out while running, with almost no trace, but allow air into the system on the cool down. This does not cause the bubbles that a pinhole to the combustion chamber does.

I appreciate all the replies, they have been very helpful.  I do not see any evidence of bubbling from either the radiator or the overflow tank.  I also do not see any coolant leaks when it is running or where it was parked overnight.  I guess it's down to the radiator or water pump, but wouldn't there be a noticeable noise if the water pump failed?