Just talked to the shop that did the test this morning and the "ugly" oil that they were talking about was a lot of gas in the oil. From what they said, no coolant or metal shavings, but there was a lot of raw fuel which means it wasn't getting burned in the cylinder and was slipping by into the oil. I could smell raw fuel at the tail pipe, and could easily hear a miss in the exhaust note.

I asked the mechanic about the blown head gasket theory or carbon build-up on the valve. Their opinion is that if either of those happened the cylinder would have SOME compression, even if it would be low, not ZERO psi. They said that they have had Subaru's with carbon build-up on the valves before and they still had some compression in the cylinders.

Removing the head by myself seems like a BIG job, especially if the timing gets thrown off. I replaced my timing belt myself, and it wasn't hard, but very time consuming. I also didn't fuss with the timing, and it was easy to put the new timing belt back on and get the timing right. Pulling the head completely off, and messing the timing up, really scares me. I really don't have the cash to have a shop do it either, so I'm sort of between a rock and a hard place. I could probably scrape the money together to have it done, but if after all of that I still need to replace the engine then I've wasted that money.