[rasterman]

You can usually nurse it along with those SOHC engines. You will need to check oil and coolant frequently, and keep an eye on the temp gauge. Pull over if it goes above middle. Many people have kept operating in that mode for months or years. Not all that good or fun, but it buys you time.

If you let it overheat, things go south pretty fast and $1950 will be a cheap memory.

Get Subaru of America involved, there are many cases where they've agreed to pick up part of the cost.

 

[rasterman]

Your timing belt will be due for replacement before the end of 2013 anyway, and you need to do a timing belt's worth of work to replace the water pump in these cars. I say do the whole thing, let them help, and enjoy your car for another 100k or so.