We'll we got the motor all apart tonight and it's bearing damage. Not even that bad. One connecting rod has started to warp. The bearings haven't even spun yet. It wouldn't have costed Subaru much to fix it them selves. Now they gotta pay big, sucks for them.
And there was no signs of any oil leaks what so ever. The valve cover gaskets are in great shape. The dealership isn't looking great now.