Its too bad you had such bad luck with your grandmothers Subaru... but every complaint you made is of simple problems that are very easy to fix... especially on that years Subaru.
If you can't fix stuff yourself you really have to find a reliable shop. Bad shops sure give good cars a bad name... when it isn't the cars fault at all.
My neighbors have 2, and another neighbor has one also. My husband helped one neighbor fix his after the shop said it would cost 2300 dollars. Two hours later he and his friend were laughing and said "it only cost 65 dollars and it was the easiest repair we have ever done"... It was the timing belt and water pump. The shop said it was a blown engine, but it was not true.
Sorry you had a bad experience, but the Subaru 2.2 engine anyway is not a problem for people who know a little about cars. And my husband is not a genius about cars, but the Subaru he worked on is still running fine 2 years later. And it goes up into the mountains in the snow even, all the time.
Subarus are pretty impressive, after that experience w Subarus we bought a FWD legacy w 255k miles and an AWD Legacy w 214k miles and the both run great! And pass smog no problem.
We go to LA and Phx and Tahoe all the time w no problems.
I owned a burgundy 1991 Turbo Legacy estate in 2000 (I was 25). It had 165,782 on the clock when I bought it. I put 18" gold alloys on it. I kept it for 2 years, and it had 189k when I sold it... to this day, over 30 cars later, it is one of the best cars I ever owned!! And I've since had M3's, LS 300's & 400's, CLK's, X5's, A8 3.7 Sport (mk2), Audi coupe's, 840ci. The list goes on.
I drove that car HARD everyday for the time I had it, and only had to change the radiator, which I did myself. And I saw it two weeks ago (June 2012) still running.