For $3500 you are correct that any Subaru WRX in that price range is a POS. I just bought a 1998 Subaru Legacy GT Wagon (5-spd) for $4750 at the end of last winter. Only 107k on the clock. Its the 2.5L 4-cyl and gets about 25-27mpg. Its an awesome car if you can get beyond the wagon (I love their wagons & its perfect for extra people / gear storage). That being said, it sits WICKED low to the ground. Now the bad part about Subarus. The year range you can afford they all have the same motors (only difference is a 2.2 or a 2.5). Head gaskets can be a common problem in a lot of them and that is an expensive fix. So if you are looking into a Subaru from 96-02 ask the seller if they have ever had it replaced. If its leaking oil or coolant....walk away, its a problem waiting to happen.
I also have a 1996 Jeep Grand Cherokee that I picked up for $1600 last month. I have always been a Jeep guy. My last Grand Cherokee I rode until it had 236,000 miles on it and it was still running strong. I dont know how you feel about SUVs, however, if a Jeep breaks....its easy and cheap to fix (most of the time). Parts are cheap, and most of the time you can find a DIY thread online on how to fix most things (within reason obviously). That and if we have another winter in the NE like we did last year, you will be glad you are sitting up high in an AWD SUV.
I actually have a CARFAX account with 2 unused CARFAX uses left on it after I bought my Jeep. I don't think there's a time frame you need to use em by, so if they are still good just PM me with 2 VINS and ill run em for you.