2003 Outback knocking + eating oil (no blue smoke)

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Alrighty. So I have a 2003 outback with a 2.5L engine. It has a bit over 265K miles on it, and it started lightly knocking about 6 months. Fast forward to this a few weeks ago and I take a look at the oil and it was bone dry. I had changed the oil about 2 months ago, so this came as a surprise. I didn't notice any blue smoke (more on that in a bit), and the spot I parked it at was bone dry with no leak marks. On top of that, the engine started knocking pretty hard.

When it comes to blue smoke, I took it out of parking after 3 weeks of sitting there and it poured a bit of blue smoke. I'm not sure if that's useful or anything, just thought I'd throw that out there.

I had a friend who had the exact same problem and apparently the oil was getting under the pistons (wtf) and all that was needed was a resealing.

Ideally, I'd like to fix this without having the engine replaced.

Cheers!
 

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