Just thought I'd follow up...Bad Transfer Case! My transfer case has developed the dreaded internal leak and was an overfull mess of mixed hydraulic fluid and ATF causing it to 'jump' once warm. I guess I'll replace the transfer case, since the rest of the car is in excellent condition and here in western Wyoming, 4wdrive is a good thing about 6months of the year. Dealer quoted me $1500 for part, $525 for labour. Not great, but doesn't sound too unreasonable, cheaper than a new Subaru...