That is way cool. I'll go onto the Aussie offroad Subaru forum and ask about the 50/50 AWD when shifting into 1 or 2 or whether you can electronically lock the center diff.
Can you do a suspension lift on the 1998-2003 Subaru Foresters? I was reading you could use stiffer springs, plus a bit larger tires for 1"-2" of lift. That gives you like 8"-9" of ground clearance.
Just FYI, Subaru tends to keep their "generations" at 5 year intervals, so a 1st gen Forester (which is what it sounds like you're talking about) is 1998 - 2002. 2003 was the first year of the 2nd gen.
IMO 2nd gens are the best looking Foresters out there (the distinctive features of the 2nd gen are the hexagon tailgate and triangular taillights.) But 1st gens can be found for quite a bit less.
2nd gens got a limited slip in some trim levels (XS and XT, I think) but not all. I don't think the 1st gens ever had a limited slip in the rear.
As far as availability, it sounds like Subies aren't common in SoCal. Which makes sense, I guess, because it's kind of a "snow belt" car anyway. Head over to the Rocky Mountain West and they are as common as weeds. There are at least 4 on my block alone (the only vehicle more popular on my block is the Toyota 4x4.) Since you're in SD, I'd say the closest large market to check out would be Flagstaff or maybe Las Vegas. You could also try San Francisco or the NorCal area, since they get snow up there and you would be getting a "CA Legal" car, which is probably important in order to be able to pass emissions.
Automatic Subarus are very finicky about tire size but as long as you buy all your tires at once, rotate them regularly and take out the fuse to disable AWD if you put the small spare on, you should be fine. Incidentally, I believe the 1st gen Foresters actually had a full sized spare. I don't think they went to the mini-spare until the 2nd gen, which is a plus for the 1st gen.