You emailed me, but I'm going to post the response because others here know a lot more about it than me.
In phase I ej25 engines (DOHC), Subaru made the piston skirts too short, and the suckers have a tendency to slap around a chew up the inside of the cylinders. For the Legacy, sometime in 1999 Subaru equipped cars with DOHC Phase I heads on Phase II blocks. For anything earlier, SoA will, after some prodding, replace the engine block. I have not had the problem show up in either of my '99s, so I have only tangentially followed the problem. Mr. Rubel can certainly sound off about the problem, how to spot it, and what the fix is, yes?