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Just picked up a 1995 Legacy Wagon with the 2.2 engine. Looks like the previous owner caught he lower radiator hose and overheated it and now the head gaskets are shot. Puffs white smokes and overheats.  Question is this is my first head gasket job on a Subaru. How hard are they. Is it best to just pull the engine.  Thanks. Any upgrades to do while I’ve got it out?

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Nothing "hard" about it.  First head gasket job I did was on a '99 OBW w/ 2.5, and I did it without lifting the engine at all, which made it a bit more of a challenge than otherwise.  Lifting engine a few inches (too lazy, ornery, and rushing to beat the cold weather to unbolt it from the tranny) would have made it a little easier - when it's that tight to the wheel wells every 1/4" extra knuckle room makes a huge difference.  But by the time you've stripped all the stuff off necessary to remove the heads, you're only half a dozen nuts+bolts away from having the motor unhitched anyway, so you might as well pull it.  I've had the engine in+out of my '95 (same as yours) a few times and it's a breeze.

The real problem you have is how much it was overheated.  If you get on top of it early enough and keep the engine temp under control, you may be okay with just the gaskets.  But if it's been severely overheated you may do the head gaskets only to have the crank bearings fail shortly thereafter.

Edited by jonathan909
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