Merv, I have an 88 Westy with auto transmission (original engine).  I had a
similar problem and found that the problem was the vacuum bellows unit that
pulls on the throttle on top of the engine.  It's a cone shaped rubber unit
that had developed a leak and therefore the cruise control wouldn't work
anymore.  It was simple to see and verify; I repaired temporarily with some
silicone sealer until I could get a replacement unit.  It wasn't expensive
and was easy to replace on the wbx configuration.  I don't know how the
Subie engine configures its cruise control actuator, but if you're still
using the original rubber device, I'd be sure to check there.

Good Luck,

John Graham
88 Westy - Hathaway
Charlotte, NC
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