Derick,
I agree that subarus have gotten much better.  If I was to go this route, I
would like to try a turbo.  Another engine worth considering is the GM 2.8l
V-6 used in many camaros,(mid-late 80's).  This engine with the tuned port
injection makes about 160HP and is very torquey.  It does about 25mpg hwy or
better in camaro.  Very cheap to keep,(<$1800.00 brand new).