I just got back from the test drive.

I had broken the transfer clutch hub off of the reduction gear.

SubaFreak kindly sent me some used Legacy parts to fix it. I saw the legacy parts are also wearing where I broke the hub off of my gear. (the stamped steel hub is welded to the top reduction gear.)

There is a thrust bearing that seems to spin against the clutch hub instead of against itself. Mine broke on a remanufactured 1994 trans so I'm not sure of the milage. I'm guessing 90,000 miles are on the 1994 tranny in my 1992 car.

I had intermittant 4x4 for a week then FWD. No codes ever flashed. (OK VSS when I spun the rear axle by hand with the fronts stopped triggered a code, but that was with the car up on jackstands after it was decidedly broken)

I really hope this isn't your problem too. You'll know when you take the transfer case off the back of the tranny. The broken hub is easy to spot. Sol. C is easy to test. clutch disks are easy to remove and measure.

Good luck.