[UberRoo]

Looks like you guys are right-on about it being a mechanical problem. I sweet-talked the guys at my local dealership and they let me thumb through their service manuals (See attachment.) I found the pinouts and wiring diagrams and tested it.

The TCU puts out the correct voltage for all situations (with ignition on and in drive, less than 0.5volts with the throttle open and 8v-14v with the FWD fuse installed regardless of throttle position.) The solenoid also reads ~12ohms which is also good.

I found a quiet place and could hear the solenoid "buzzing" when in drive with the ignition on - which goes away when you apply throttle (or put in the FWD fuse which presumably stops cycling the solenoid and just sends it constant voltage.)

The factory service manuals really don't help much with trouble-shooting mechanical problems, however, in a Subaru technical training manual I got from a friend, another possibility is discussed.

From the training manual:
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"Torque bind caused by seized MPT [multi-plate transfer?] clutch.

The MPT Clutch can become seized due to excessive slippage caused by Teflon seal rings, which are pinched and split from a previous repair for a different complaint/procedure. The latter complaint of binding may have been preceded by a complaint of no 4WD application. This would only be noticeable in conditions that would have required 4WD to keep the front wheels from breaking loose.

1. The "POWER" light does not flash upon start up indicating a probable mechanical failure.

2. Installation of the front wheel drive fuse makes no difference.

3. The Select Monitor [external diagnostic computer?] shows normal operation of 4WD duty. However, there is a code for speed sensor "1" in memory due to the fact that some wheels slippage had occurred when the MPT clutch had been slipping before it seized. A quick check of both speed sensors as compared to the speedometer all show approximately the same speed.

4. MPT clutch pressure checks show lower than specifications.

5. A resistance check of the duty solenoid "C" circuit shows that the circuit is complete and the solenoid is within resistance specifications.

6. Disassembly of the transfer housing reveals an overheated and seized MPT clutch. In addition, the Teflon seal rings are pinched, cut, and deformed."
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Michael Blue, this section of the training manual may particularly interest you. Intermittent AWD sounds symptomatic of this problem. Maybe - maybe not. You might read the symptoms closely and see if they describe your problem.

svx_commuter, what was the solution to the stuck transfer valve? Did something just need cleaning or was replacement necessary? (I'm wondering if might be able to agitate a sticky part and flush the system. Wouldn't that be nice?)

As for me, I doubt the article apples, but my loss of 4WD might be an omen that my MPT is about to seize. In either case, sounds like I'm gonna have to crack 'er open. ...darn...