Wow...good response to this one! Thanks for the thoughts thus far. I went and looked at the car Sunday...and when you drive it the power steering does feel a little strange...kind of like if you have air in the system. It would not overflow from the cap at idle, but I drove it a couple of miles and it leaked out the cap during the drive. I started looking around the car and I found a small leak on the passenger rear of the engine bay. After lifting the car and sliding under for a closer look, I noticed teh power steering lines are very rusty and one is seeping through the metal...you can wipe it off and it seeps right back again. I am going to replace those and see if I can flush the lines out....and maybe check the pump flow from a couple of bottles of p/s fluid. Oh, how can you tell if the tranny has been fixed to prevent the failures that are so common on the early cars? Is it possible to tell from an external visual inspection?
Gotta call Subaru Parts.com tomorrow and get p/s line prices.....those should be ugly!