'94 Legacy Turbo Differential??

I have an "interesting" (read disturbing) problem with my '94 Legacy Turbo. First, some info.

1994 Legacy Turbo - 4 speed EAT all wheel drive 160,000 km (100,000 miles) New tires

About a year ago I took it to the dealer because there was a definite hesitation before it would go into drive. I'd move the gear selector to D, and it might take 10 seconds before it actually kicked into gear. Wanted the dealer to replace the transmission fluid, they basically told me the trans was on it's way out. I took it to a local transmission shop, they changed the fluid and told me it looked very good, no bits of metal or anything and the fluid was very clean.

Recently (I don't know when it started, I don't drive the car much and my wife never noticed the problem ???) the problem started. If I'm backing up or moving forward, if I turn the wheel to lock left or right, the car acts like the brakes are applied. I asked the dealer for free advice about it, and based on my description they said it sounds like the transmission is going, or the rear differential. I have removed the ABS module (plug in dooby under the hood) and the FWD fuse, and get the same result. If I turn the steering wheel to full lock it acts like I'm applying the brakes. When I straighten the wheels it's ok. Oh yeah, there was a definite whine coming from somewhere on the highway last night. Couldn't tell if it was from the front or back. Took the back roads home as it went away if the engine wasn't pulling too hard.

So, has anyone encountered this? What's a rear differential going to cost me? There's a very low mileage '05 Legacy GT for sale at a local dealer, should I try to dump the '94 on them and have the car I'd really like to have? :-) I'll tell my wife you guys said it was the way to go. Sorry for the long winded note. vern. . . .

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Vern
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