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Gender
Male
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Location
Locust Grove, VA
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subaruforester.org
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Biography
45 y/o male, work in government sector
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Vehicles
1999 Forester L
Bobaru71's Achievements

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As General Disorder recommended, switch to 5w30 vice 0w20 as well as buy full synthetic at WalMart ~ much cheaper there than Autozone or Advance Auto. Get the best money can buy. Personally, I use Castrol Edge w/Titanium 5w30. If you don't want to do the change yourself just have the dealer do it but watch them pour it in. Otherwise, take it a reputable garage, search BBB, yelp any type of review you can find to locate the best one in your area and have them do it. Dont mess around with cheap maintenance items, maintaining your Sub with the best you can buy off the shelf will go a very long way for longevity and overall health of your engine. Pay a little more now or much more later on down the road always applies here. As for the oil loss, as GD explained, much has to do with the piston rings but its exacerbated by low viscosity oil such as 0w20 and someone may correct me if I'm wrong, but I believe the oil consumption issue is not nearly as pronounced overseas as it is here due to the recommendation to use ultra low viscosity oil such as 0w20. I believe European Subarus and most of the rest of the world recommend 5w30. R
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One of the reasons that your Baja runs better (that many people forget ) on 89 is the added detergency which of course cleans the intake valves and some of the piston tops resulting in the smoother operation. I run 93 octane Shell v-power in my 99 SF consistently merely for the detergency and no perceived power increases. This way I forego any recommended fuel additive cleaning every 5k and the detergents keep my entire fuel system clean on a constant basis. I get ~27-29mpg with a/c on during my commutes using 93.
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Certainly a plausible scenario that one or more compression or oil scraper rings are worn beyond repair. However, did this engine overheat at all previously to where it may have damaged the cylinders or rings? There is also a small chance that your rings are just stuck in position and may warrant a cleaning. I'd recommend beginning your journey in that direction first. If that does not fix the issue then of course engine tolerances are worn beyond the scope of cleaning and Imdew's suggestion would apply in this case.