Subaru Repair: AT check engine oil light, check engine oil, outback legacy

Question
I have a 96 Outback Legacy.  The AT check engine oil light comes on and blinks for about 10 - 15 times after I start the car.  

The wheels bind up when you turn them hard and the car will stop rolling.  We thought it was the CV joints and replaced them, but it did not help.

Any suggestions?

Answer
On that year Subaru, if there is a problem in the transmission, your AT Temp light will flash 16 times and then go out to indicate a code stored in the transmission control module. Most likely you have a transfer case problem. The transfer case is the back part of the transmission and if the transmission fluid is bad, or you have 4 tires that are not identical in size and amount of wear, or if you have problems with components in the transfer case, you will get the binding you described. Ideally, you should have a computer diagnostic check run to see what code you have. A Subaru dealer is your best bet, or someone who is an expert on Subaru's. Feel free to have the code run, and email me here or at smalltowncharlie with the code.

If you want to try something before you go that route - which may or may not work - try changing the transmission fluid. On a Subaru it is as easy as changing the engine oil. Drain the transmission fluid, always use a new transmission drain plug gasket, refill with aprox 4.5 quarts of transmission fluid, and heres the part that may or may not help - install 1 4 oz bottle of Limited Slip lubricant additive, available at any gm dealer - part number 10523578. Then, drive the car in circles for a few minutes each direction. This is worth a try, because frequently it works; but, with a flashing light, I just dont know.

Good luck!