lousy gas mileage

[OB99W]

I noticed that unburned gas smell in my legacy too on first starts in AM. It is coming from exhaust and not from fuel system. That is why I believe the car runs too rich.

To at least some degree, you're experiencing normal cold-start operation. A cold engine can't use fuel efficiently, for several reasons. The mixture has to be enriched and idle speed increased, just too keep the engine running acceptably.

 

Carbureted engines use a choke to reduce air intake, and a fast idle cam or other device to hold the throttle open a little wider until the engine warms up. With more-modern FI systems, the computer is in control; however, at cold start, engine management runs "open loop", a default and somewhat rich state. That's necessary because, among other factors, O2 sensors can't even function when cold.

 

I suspect that the '00-'03 Subarus aren't particularly prone to what you mentioned. When cold, the exhaust from my '99 OB certainly smells different than warm, as does that from my '69 Firebird . It's the nature of most gasoline-fueled engines.