We put the car in because of the notorious head gasket problem, only to find out the heads were warped and needed to be replaced. I'm sure the valves and valve guides are original, and I doubt they did a compression test. We were told at 100,000 miles about the head gasket, but didn't have the money to fix it. We finally did now, at 170,00 miles. To be honest, the engine is running great, it's quiet, getting around 25 mpg. I was thinking of going to a 5w40 synthetic to see if that would help. I was also wondering if an air-oil separator would be beneficial.
API: SN, ILAC GF-5 "Resource Conserving" SAE 5W-30 weight oil is what is recommend by Subaru, as API: SM is obsolescent and ILAC GF-4 has been replaced by GF-5. 10W-30 and 10W-40 oil meeting the same specifications are suitable alternatives as per your Owner's Manual and the Repair and Service Manual.
I have been a long time VW / Audi owner and for more than two decades the VW Group has set its own quality standards for motor oil used in its various engines throughout the group, as I have previously mentioned. Subaru has less specific requirements than the VW Group, currently, but they still have oil standards.
I would use only an oil that meets those standards. API class SM is obsolescent and was replaced with backward compatible SN oil. There are actually three versions of API "SN" classification oil and one of those is "Energy Conserving". Oil consumption varies widely, based on a given engine design and its operating environment at any given time.
So, as a baseline to try to solve this problem. I would use, if you are not already doing so, a brand of oil your prefer, conventional or synthetic (Subaru does not specify which one, so your choice), that specifically states the following somewhere on the bottle:
SN, 5W-30, GF-5, and "Resource Conserving".
Please keep in mind that the SAE viscosity recommended, and the alternatives, are based on the ambient temperature ranges Subaru expects their cars to operate in during start up. The additive packages found in the oil and the base stock used will determine the actual behavior of the oil at normal operating temperature within the engine.
An air-oil separator should not be needed on your or any other stock street car operating normally. Yes I am aware of the reported issues in gasoline direct injection engines and other modern engine designs. I understand that others believe they are necessary and in racing applications I would agree for the need, but a racing motor, even one based on a stock motor, is different than that used on the street.
In the case of your EJ motor - or mine - if you have sufficient crankcase blow-by to overwhelm a correctly functioning PCV system, then I would focus on correcting the problem rather than mitigating the symptoms of the problem.
Your engine ran fine for 70,000 after being told to renew the head gasket, as I understand. Not a bad thing. Finding an aluminum cylinder head warped with such mileage when renewing the head gasket is not unusual and it is not uncommon to find on any high mileage engine. Resurfacing the head gasket mating surface on a cylinder head, as a matter of course, warped or not, is not uncommon either.
How long in terms of both time and miles has it been since the work was done? Is there any evidence of an external oil leak anywhere on the engine?
You state that, except for the oil consumption concern, your engine is running and performing well.
When you state the heads were replaced, were your specific heads rebuilt? Or exchanged with another pair that were rebuilt or re-manufactured? Or did the shop that R&R your heads do the rebuilding of the heads themselves with the possible exception of having a machine shop resurface the head gasket mating surface, or other work like replacing the valve guides?
Given the tight confines of the Subaru boxer motor in the engine compartment of their cars, doing a compression test and a follow up leak down test is more time consuming, but not really more difficult than removing the spark plugs in the first place. I would certainly do both these tests moving forward, if for no other reason than to establish a baseline of your engine's current health.
The late 1970s through early 1990s was a period of rapid changes in motor oil and diesel and gasoline fuel formulations, both here and in Europe. One of the unexpected problems that occurred during this period was that rubber seals used in engines already in service failed. The causes varied through this period, but one of the results was the change to the use of Viton brand rubber in O-rings, radial seals, and especially valve stem seals. In the case of VW /Audi valve stem seals, the characteristic of Viton rubber valve steam seals is they are a olive or slug green in color. The green was the give away that they were not identical seals made without Viton.
Leaking valve stems can also contribute to poor manifold vacuum and can be in part diagnosed with a vacuum gauge. Valve stem seals, are a type of radial seal. They control the amount of engine oil that must flow toward the intake and exhaust ports to lubricate the valve stem as it moves inside the valve guide. If the seal is hard and brittle or cracked or damaged in such a way that the flow of oil exceeds the designed in rate of flow, then the engine will exhibit increased oil consumption.
In spite of not knowing at this time what exactly was done to your heads, how long ago the work was done, and the some total of the parts used and their quality, I am in the end making a guess as to what the source of your old consumption is. I lean toward the valve stems. They can be replaced without removing the heads. However, head gaskets seem to be the common and reoccurring weakness of Subaru boxer motors. Head gasket failures is real world usage is not unique to Subaru.
Years ago with the motors used in MkI and MkII VW Golfs, for example, head gasket failures in motors rebuilt with aftermarket OE/OEM head gaskets was attributed to the composite gasket being too "old", dried out, hard and "stale". The idea being that fresh recently produced head gaskets were visibly moist and somewhat pliable. At time, at least the OEM manufacturer Goetze made the head gaskets that one would purchased at VW Dealers. Goeteze packaged their head gaskets inside thick heavy duty high density polyethylene plastic bags that were hermetically sealed along with a cardboard backing to support the gasket. Other suppliers the aftermarket and the “gray market” imported from NOS supplies and other sources, shrink wrapped theirs like a typical retail product. For years now, the VW Group has adopted the practice of using "Use By Dates" on spare and replacement parts that have an actual shelf life including head gaskets.
As I understand things, the weakness of Subaru head gaskets is the design itself. There apparently is a new Multi-Layer Steel (MLS) that many gasket manufactures like Mahle, Fel-Pro, 6-star produce, to name a few.
Yet, there is at least one author of a YouTube video about Subaru head gaskets that points out that the best MLS gaskets retail for about $50.00 each but, they also note one can find conventional composite gaskets for Subarus on the aftermarket for about $15.00 each. An example one of those composite gaskets they show on there video as having failed after just 2,000 miles.
In trying to solve your oil consumption problem I would use the quality and grade of oil Subaru recommends and I would focus on proven diagnostic practices to determine the true health of your engine. Hopefully, your problem will be resolved that way.