Needs a crank pulley (harmonic balancer, etc) and a new mechanic. Any idiot can see the balancer rubber has failure. Which means his mechanic is *less* than an idiot.
Keyway and key are fine. Replace the pulley and the center cover (and any other timing components that are damaged or due) and move on (with a new mechanic).
GD
Need a new harmonic balancer, and a new mechanic.
The “dampener” bit as previously described above has chewed out and allowed the outer steel ring that the belts run on to walk backwards or forwards in relation to its centre half.
Keyway is likely to be good still.
A new cam cover section would be recommended too.
Cheers
Bennie
Looks like the Damper separated and walked back into the cover. I'd pull it apart and check the components.
If it's just the crank damper you can inspect the shaft and key and replace it. If the Timing belt is close to due you may as well do it and all the idler pulleys.
Photos of what you have going on with the wiring would be very helpful.
Don't have any photos on-hand of my own to show at the moment...
Do you have a Haynes Manual? Would recommend volume 681 for 1980-1988 Subaru 1600 & 1800
the previous owner had timing gears/belt redone at 156,890 , water pump thermostat, at 158,190 (all records from dealership came with the car), the car has 188790 on it now, I serviced it when i got it, checked all fluids, and tuned it up, i'm thinking its good for another 100,000