Happy Ending (Hopefully)...
After my ordeal of getting the $1800 quote at my normal service dealer, I took my 07 XT into the Subaru dealer I purchased it from and raised hell. I went in, found the business manager, and explained to him my situation. I told him that I bought the car from them 5 months ago and only put a few thousand miles on it. To have such a expensive, yet small, repair was completely unfair and outrageous. He didn't think it sounded right, so he took me to the service department. After reexplaining the situation to the head service guy, he looked up my car's history and the parts I needed and started to work on finding me a solution. They looked at the original history of the car and found out that the first owner had purchased the gold plan, and that it was still under the mileage, but that it wasn't transferable anymore since it was past 30 days of sale.
After calling Subaru and getting authorization from them to assist in the matter, the two went into the service managers office and talked for 5 minutes. After which all 3 came out to talk to me. This was their suggestion. Let us check the car out and verify what the first service department diagnosed was correct. If it was, they suggested Subaru would pay for the parts, and I would pay for labor. On top of that, they would give me a loaner car until the job was done. I said this was fine, but not to do any work until they called me.
Well this morning they just called me to say the valves needed to be replaced and that it was an estimated 2-2.5 hours worth of work which would come to about $250. The only issues is that the part won't be available until Monday, but that I could keep the loaner until then. So after the $150 I spent at the first dealer, and the $250 I'll spend at this one, $400 is a much more manageable and fair number to pay in my mind. After being faced with spending $1800, it almost seems like no money at all.
I won't be completely relived until Monday comes and I pick my car up, but at least I can enjoy the weekend not thinking about how I'm going to pay for my fiancees wedding band AND pay for this BS repair.