[lee]

this describes very closely the symptoms of my front differential dying. Internally a part of the aluminum housing broke off and wedged between the ring and pinion. Since AL isn't compressible, the gears ground themselves up on the AL at the point where it was caught in the teeth. On inspection, the noise at each rotation is the point where the teeth were chewed. In my case I bought a new core and rebuilt. It might be possible to find a new differential housing and match it to the tranny. But it will require new ring & pinion and a tranny pull down anyway.

sorry if this happened to you, don't know what Subaru would say about the core charge (since part of the core is toast). If it happens to me again it's 5-speed time.

best of luck.