Weird Radio/Electrical Problem

Electrical problem
2002 Subaru Impreza All Wheel Drive Manual 140000 miles

So, for the past year or so the radio in our '02 impreza wagon has been acting. Strange. Every so often (and this became more frequent lately), the radio would suddenly get "stuck" in whatever setting it was on while you were driving it. When this happens we can't change the volume, the station, can't turn it off, if a CD is playing we can't eject it (it just keeps looping the CD indefinitely). The wierd part is that this continues to happen even when you turn off the car and pull the key out of the ignition. The radio stays on in the same setting it was while we were driving it.

Now, we don't have one of those cars where the radio stays on until you open the door, either. When this first started to happen, we tried everything to get the radio to turn off. We'd restart the car and shut it off again (sort of like rebooting a computer). Nothing changed. The radio stayed on and stayed "stuck". We tried pulling the fuse for the radio. Nothing changed. It stayed on and stuck. The ONLY way we can turn off the radio when this happens is to pop the hood and disconnect the negative terminal on the battery. Then we just reconnect it when we want to start the car again.

Now, finally, two days ago the radio just stopped working alltogether. It won't even turn on anymore.

My question is: is this some problem with the factory installed radio? If we get a new radio installed will the problem go away? Or will we just risk frying our new radio?

We want to get a new stereo installed anyway, one with MP3 playback and an auxillery jack, but I don't want to get it installed only to have the car fry the new stereo, too. Any suggestions?