I'd go with the EJ22 (personal fav engine of mine) .. cheaper to find than a EJ20.. hell you can get em in working condition from junkyard for around $500.

I'd suggest a Ver5-Ver6 front center rear diffs.. and axels etc etc.. thats the expensive part.. and a type RA 5 speed (or at least the gearset..)

hardest part of the swap is the wiring..

and a 95-00 Impreza L (RS) would be my choice.. stay away from the brighton.. but definately go coupe.. either the 1.8 or the 2.2 NA varieties.