I had to fix my leaky oil pump on the 95 Outback wagon, so I replaced the camshaft and crank seals while I was in there, and put in a "newer" water pump from a wreck, $10, also two pulleys for $5 each! [also newer covers for cheap, since the nuts broke on mine during removal] The timing belt and tensioner seemed fine so I reused those. Since it isn't an interference engine I'm willing to experiment with used parts and a little of my time and save some bucks.

With my smaller 12 volt Makita I carefully drilled pilot holes into the cam seals [radiator out] for small screws, and easily pulled the seals.

After screwing up the first timing belt attempt, I think when I installed the tensioner, the car ran but rough. Went back in and was very careful the second time.

The question: how "dead on" should the crank and camshaft marks be at their 12 o'clock marks? On the left [driver's] side I'm off by maybe 3 sixteenths inch, and belt teeth are 5 sixteenths apart. The engine runs smoothly, but after perusing the forum perhaps I'm a little paranoid. I'm thinking this deviation might be due to the used belt stretching. How much can a belt stretch before it's useless [not broken].

Any thoughts?

And thanks for the invaluable wealth of info being shared here, wish I'd found it sooner. :

Sounds normal to me. Belts don't tend to set up as precisely as gears or chains and often adjust a bit at the first running. Usually if it is off the engine does not run well.

I haven't worked on that early a Suby yet, but I just did timing belt on '00OBW, and I aligned the cam sprocket marks (not arrows) with the locations indicated in the service manual, which on the LH side was a notch in the back timing belt cover. I think it is almost exactly 12 o'clock position, but the manual said align with indicated marks.