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Another thought occurs. I apologize for focusing so much on engine/trans swaps when they're so far down your list, but I think this one's worth looking into. The EJ series engines can interchange heads and long blocks. Apparently the EJ20 engines have too small a bore and will cause weird combustion chamber issues with your heads, but the EJ22 engines work great for this. You could get an EJ22 short block and some high-compression pistons (to compensate for lowered compression from the swap). This would allow you to retain the higher flow of the EJ25's heads, but with the reduced displacement and friction of the EJ22. This can all be done with your stock wiring harness and ECU. If you've got the experience, a little help, and a good shop for it, the whole thing could probably be done in a weekend. On my side of the continent, the whole engine can be had for $300 according to car-part.com .
The '96 Outback I had had the 2.2 SOHC engine, and it was a really solid engine. You might also look into swapping the whole thing, as the SOHC heads were less problematic and produced less friction, though they do take some power away due to reduced flow.
Good luck with this thing. I'm really interested in seeing how it turns out.
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