I believe that the head gasket issue was limited to certain models of the 2.5 litre engine.

I haven't kept up with Subarus for a few years, but my wife's 1997 Impreza was one of the best cars I've ever driven. We'd still be driving it, but it got smashed by an inattentive SUV driver.

I got a lot of good info from this website: http://forums.nasioc.com/

I haven't spent any time on it since the Impreza got wrecked, but I bet it will have some good stuff for you.