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I know this has likely been posted multiple times, but every situation is different, and I haven't found a straight answer from searching.

Background: I recently picked up a 99 forester s single cam 2.5 with about 142k miles from a guy I went to school with. He said he picked the car up with about 120k miles from an old lady that was the original owner. Im guessing he drive it hard, but she didn't. He said it burned a little oil. It also leaked from the dragon plug bolt. I put a clutch in it, fixed the leak, the timing components looked fairly new, no seals were leaking, no visible signs of exterior headgasket leak. I replaced the PCV valve which was gunked up. Did valve cover gaskets/tube seals, and new spark plugs. Also changed the oil when I got it (which was black). Inside of the engine was surprisingly clean and looked much better than expected.

It still burns oil. About 2 or 3k miles later my oil light came on for a split second a few times. It was hardly if at all on the dipstick. I put oil in it right away (at this time I also switched from 5w30 to 10w30). Then the other night I was driving on the freeway and had to pass a slow driver that was in the left lane. I downshifted and was heavy on the throttle. I looked back and saw a big cloud behind me (its also cold here as its winter in MN so im sure that added to it). I then got a flashing CEL. I believe the last time it flashed at me it was for sure cyl 1 missfire, possible 2 as well? I can't remember. Car has lots of power and doesn't really feel like its missing tho. I should also add that neither the oil or the coolant look milky

What could be potential problems and what should be my next step in narrowing down the issue? I don't want to just start throwing parts at it..

Thanks in advance for the help!
 

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A check for fault codes would be my first step. If you are burning oil a fouled o2 sensor may be the cause of the flashing light.Reading the code will hopefully get you pointed towards the cause. Cheers Doug
 

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02 sensor is good. I currently don't have a rear one, hopefully getting a bung welded in for that today.
Last time It flashed before the other night was a misfire on cyl 1, possibly 2, I can't remember. I'll check when I get home from work
 
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