[sperry]

Originally Posted by TexasSwift

Just to give you another possibility to think about. The “rebuilt” transmission may have been a non-SVX junkyard replacement. Since the SVX had an exclusive gear ratio of 3.54 any other Subaru transmission, though it will bolt up will not work. That is what happened to the previous owner of my ’92. The result was binding of the different front and rear differential gear ratios. This resulted in the front diff. destroying itself, which is why I got the car for $500. Since when you can isolate the rear end with the fuse and the binding goes away it makes me think the ratios are different. The transmission making noise maybe from wear the front differential has suffered to this point.
There is a transmission label on the driver’s side top surface whose codes indicates the model and ratio. I don’t know which ones are SVX codes, but I would check that first. I took the bad transmission opportunity to install 4.44 gear ration transmission and rear end.
Good luck in figuring it out,
Keith

If the front and rear diff ratios were different, there would be massive binding of the center diff even if driving in a straight line (trust me, I know from 1st hand oopsperience).

Since the binding is only when turning, it's almost guarenteed to be the transfer clutch and/or related valves/solenoids.