Is your car paid off? Try to avoid borrowing to fix your motor. I know you can spend a lot less than you're talking for a factory shortblock with some drop-ins. I spent some money on a built motor from Maxwell power, but they do sell a pretty good package for a budget: 2800.00 for a new SB with JE pistons. Similar deals can be found elsewhere.
It's just not wise to pile debt on top of debt. Unfortunately, I don't see Subaru fixing that motor of yours. But I think you do have recourse on that 600.00 if you did not authorize beyond the 150.00. Go upstairs and call SOA, to start. Also, if you paid with a credit card, you can dispute the charges and have them pull the money back from the dealer pending resolution.