Liberty Low Range

I own an MT 2001 Liberty (Australian name for Legacy) 2.0L

When using Lo-Range, I get a terrible burning smell. To me, it smells like burning gear / diff oil (definitely NOT engine oil), but my last service at Subaru dealer revealed NO leaks at all - very clean under car. They detected slight clutch lining smell however and suggested that was what I was smelling.

I didn't ask them at the time, as it wasn't much of an issue, but the more and more I use lo-range (for hill starts, etc - ahhhh, to have the

2.5L in my car!!! 2.0 is SOOOOO sluggish down low) the worse and worse the smell gets.

My question is, shouldnt the smell be more noticeable in HIGH range (when more slipping of the clutch is required/likely) ??? Surely in lo-range, there is less strain on the clutch due to the easier gearing? So why is the smell worse when I use lo range, rather than high?

How does the lo-range engage on subarus? Is there an intermediate clutch arrangement on the transfer case, and perhaps THIS is what is slipping and smelling???

Any ideas or help appreciated

Osiris

1991 RS Turbo Liberty (Legacy) Sedan 2.0T MT 1985 L-Series FWD Leone Sedan 1.8 MT 2001 Liberty Wagon 2.0 MT
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