I'll be honest, I don't know what the problem is, but I don't think it's the things suggested above. The symptoms that you've observed indicate there's something wrong with the cooling system. The hoses themselves could be to blame - I've always been told that if the hoses collapse in like that that it means they need to be replaced. Perhaps the upper hose was replaced (which is why it doesn't get sucked in any more) but the lower one wasn't so now it's the weak spot in the system?
The other thing I would check is to be sure the system was properly vented while filling so that there aren't any air pockets.
Last but not least, what radiator are you using in the car - the stock '93 one, or the one from the '01 donor car. If it's the former, it might not be big enough for the bigger engine, which could be causing the overheating problem.
I'd replace the hoses first if it were my car.
'97 Legacy 2.5GT sedan