Try checking the oil again, but this time pull the rubber o-ring off before sliding the dipstick back down. There's a well known Subie issue with the air pressure caused by the o ring seating causes inaccurate readings. Just make sure you put it back on when you're done. White smoke is never good, no oil is never good, smoke in the engine bay is never good. A new shortblock will run you about $2000, may want to have the heads sent out and port and polish while you have it apart.
Take your oil pan off the old motor and check for metal shards, if you find any, start shopping for a new turbo as well because there's a decent chance some have made it through the oil lines.