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Wow, that's a pretty harsh lowball from the bowtie guy. But then I gotta ask... why did you even mention the possibility of an engine swap?

Yes, some people have hobbies/side businesses turning around troubled subies just like with any other car. I don't personally know any, but they are out there.

Mechanically, you *could* use nearly any Subaru engine back to about 1991, but electronics & emissions laws will restrict you much more than that. I have no idea what the laws are in Oregon.

If I were in your shoes I'd put a used engine in it and if I didn't want to keep it, trade it in to a different dealership using their own rules: what they don't know won't hurt them.

I wish you luck!
 
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