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I bring this to the board of knowledge here. I do not have knowledge of Subaru personally, please help me. I have a 1996 Legacy Outback with a 2.5 and it has 236,000 mi on it. I just purchased it with the knowledge of it having problems. At least 1 and 3 valves are bent, 2 and 4 have 160 psi compression. It does run! Just not well. If I'm going to pull this motor for the repairs...I'm going to rebuild it. The question I have is...Do you have to Bore the Cylinders at 230,000 or are you just honing and buying rings. Every machine shop here acts like they have never done it. 

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Probably because they haven't... There's a special process to bore subaru cylinders; they need to bolt a thick plate to the deck because the bore is actually slightly oval when the head isn't bolted on. The torque plate, or whatever they call it, pulls the cylinders into the proper shape, otherwise they'll end up oval after being bored.

 

It's not worth rebuilding a 2.5 with that many miles, if the bottom end is fine, replace the valves and just drive it. Or swap in a lower mileage ej22.

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With that many miles, if you just do heads it might blow a ring when done. I would recommend a 2.2 instead.

Agree with above. With 236K miles on the clock, I would be very reluctant to rebuild an engine with that much wear. A 2.2 motor is a nice swap, but what works is something back in the mid to late 90's. It is now a stretch to find a 2.2 that is still good, and worth buying and installing.that is that old. 

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