I am taking in my 2000 OBW in tomorrow for service. The check engine light comes on after driving the car for about 2 minutes, after the car starts hesitating. I am guessing it is the O2 sensor, this will be the third one. Car now has 80,000 miles on it. car also has a loose timing belt tensioner. I know subaru will want to change timing belt and tensioner. Should I have it done? I am getting a noise in the front when the car first starts then it goes away after driving it. They previously said that this was the tensioner. If i chose to wait until 100,000 to have it done, will it cause further damage? Will this cause the timing belt to break and ruin the engine?

If it were mine, I would have it done now, since you're doing most of the labor anyhow ... but not by a Subaru Stealership. Find a good indie in your area.

You have an interference engine. Any known problem with the timing belt, idlers, or tensioner should be addressed ASAP!! If the belt breaks, or even just slips, you engine will start crunching valves. Three grand is about the cheapest repair bill that you can hope for if this happens, and you may need an entire replacement engine.