1999 Outback overheating

Hi, I have a 1999 Legacy Outback Wagon AWD 5 speed. I purchased it new in November 1998. I have been faithful in servicing it. After a speedometer problem (fixed by replacement at 61,020). I now have about 130K (old + new) on it, but I don't know how many miles I drove that weren't recorded because of the speedometer/odometer problem.

I had trouble with it this weekend doing a 400 mile trip one way. When I hit stop and go traffic in high heat and AC on, the car jumped to 3/4 H on the gauge. I pulled over and turned the heater on full blast. The heat gauge immediately went down to normal. There were no further incidents. Then on the return trip, I stopped to run into the store. I left the AC on and less than 5 minutes later, it was on H. I immediately turned the heater on and it went down quickly. When I'm moving, the car is fine with the tempurature, but if I slow after driving for a long time it rises. I noticed yuck (residue) in the coolant reservoir and when the engine is on during the hot driving, it bubbles too. Now I noticed the coolant is very low. I drove it today, with not a problem, but only about 15 minutes at highway speeds.

I keep reading about the blown head gasket problem. I'm guessing I have that same problem. Tell me if I'm wrong. Now, if I am right, is there any way to fix this myself. My subaru dealer told me this could happen and that it is happening with 9 out of 10 cars around this mileage and it will cost me $2000 to fix it. Is there any way to fix this without pulling the engine? Are there any easy manuals to tell me how to do this? Should I even bother? Will the new gaskets even last? Should I junk the car? Loved it before this weekend.