[ScottyS]

You want a stock Turbo Legacy muffler (twin-tip)? I will donate one.

That's a 1.8, right? I would just start stashing motors and run them until they go and then drop in another one. I don't see the point in spending a whole lot on building 1.8's.

I don't know if tuning is advantageous or not with that motor, but there are ways to "tune" the OBD-I turbo Subies, so it might apply to the NA ones too. My 1991 ECU's have an add-on slot for an EEPROM chip, and a company in Vancouver is developing tunes for the 22T, my version for a "Stage 2" is in the mail. They have the ability to program a chip that goes in the factory upgrade slot, it's just a matter of getting the maps right. This has also been done in the past for EJ20G OBD-I setups.

I would go in this order:

Fix rev limiter (is it in limp mode or something? Reset ECU/pull codes)
Fix brakes, you can always wrap the brake lines in something rubber at the contact points if you can't move them (like fuel hose)
Protect gas tank
Fix suspension
Look for 1.8's to stash, change as needed
Get LSD