I just bought a used 1999 Subaru Impreza L awd and the second week into my ownership the same situation is happening as well.
Youre going to need a phillips and flathead screwdriver.
You will need to take the lower steering column cover off which is secured by 3 phillips head screws.
Once undercovered there is a manual release that you press with a flathead while you attempt to take the key out.
This is a temporary fix because I still need to do this everytime I go to take the key out. I dont plan on making this a ritual everytime I park. For now I have the steering column cover off and flathead on head.
If I find a permanent fix I will update.
Wednesday, September 1st, 2010 AT 2:30 PM