My motor went south at around 161k with a bad rod bearing. I ended up doing a full tear-down and rebuild. Cost was a bit north of $1k for parts as the crankshaft was toast. I used all factory parts for the rebuild except for the bearings, which were Cosworth.
Before ordering ANYTHING, pull the motor, open it up, and inspect it all. It will take you a bit longer, but no sense in ordering something you don't need or finding out you need oversized pistons, rings, bearings, etc. Have a shop clean the block. If you remove the oil passage bolts (I did) note that the crush washers are NOT in the factory gasket set and will need to be ordered separately, along with the camshaft end caps (rear seals). I also did a valve job on the heads with new seals and retainers, which are in the gasket set. Since my cylinders were in good shape, I did a light hone with a bottle-brush hone for the new rings.
So anyway, for assembly I installed the following new parts:
Crankshaft
Connecting rod
Main bearings
Rod bearings
Piston rings
Gasket set, (almost) complete (Subaru)
Overall, I wouldn't rate the job as super difficult, just make sure you have access to the factory service manual and read the relevant sections beforehand so you can acquire any special tools (14mm hex bit, piston pin extractor, etc) or ask questions if something doesn't make sense. For pulling the piston pins, I made a puller out of a long bolt and ground off the head to make sort of a cam and it worked great. Coming up with an on-the-fly tool for removing those was probably the most difficult part. Second problem was the screws holding the oil/air separator cover were frozen. I had to drill two of them out, but get a impact grade P3 driver bit and use a drill and they come right out. I didn't have one for removing the cover, but I DID have one for taking the oil pump apart and it made it a breeze. Note that you may not have a problem here because Subaru made a design change to hex head screws around '03, but P3's are in the oil pump. When putting everything back together, use plenty of engine assembly lube on moving parts (duh), but apply the "fluid packing" sparingly. There's a drain channel at the rear main seal and you want the be sure none gets into it. I used the Fugibond stuff (Subaru #004403007), but others have used ultra grey with good results.
I've got around 2k on the motor so far and it runs great. One thing it doesn't do as much is search for gears when climbing a grade, and it seems to shift better. Other things I highly recommend for this generation of Outback is the '06 Baja Turbo suspension mod. For me, it made it the car Subaru SHOULD have built.