I am relieved to say that after over two weeks and 105 posts, the problem has been solved!
The culprit being a defective timing belt. I picked up the new OEM belt from subaru earlier today. Upon inspection and comparison the new belt and previous belt (PCI) looked essentially the same. The markings on the new belt from Subaru however were much more helpful. There was a dotted line across the belt which related to alignment with the crankshaft sprocket and timing marks, whereas the other two marks were solid lines for the right and left bank camshaft sprockets. Simple and easy no guess work involved.
I did notice that there was more slack on the new belt as opposed to the old. This was confirmed when I removed the allen wrench from the hydraulic tensioner, the piston extended sigificantly more than with the previous belt. Perhaps I had the wrong belt all along...I'll never know I guess.
I know others have used PCI for the timing belt kit and have installed without any problems. But like any mass produced product I unfortunately came upon a defective unit in the bunch.
Thanks again for everyone's help, I am greatly apprectiative. Hopefully my misfortune and the responding posts will benefit others in the future.
http://youtu.be/rHGZzcjjF2I