I have a wagon just like that (91 Legacy, no turbo). love it (except for the
issues an old car presents). 220,000 miles (bought it used at 145000)
first, watch the engine while it is squealing. This will tell you lots.
A noise like that can be important/deadly or a simple adjustment. most
common would be a belt adjustment.
then with ignition off (duh!) check the accessory drive belt (once called
"fan" belt, but your fans are electric). On the part that goes down from the
top pully (I recall this is the adjustment bracket, not an accessory) push
the belt towards the left as you are looking at it. if it moves > about 1/4
inch, you need to tighten it. You will need a 12mm socket with a short
extension. Look at the belt bracket and you will see a long screw that goes
vertically. on the bracket you will see a horizontal bolt that goes in
towards the engine at a point near where the long screw goes into the
bracket. loosen that bolt, a turn or so whould do. then tighten the long
screw a little at a time while testing the tension in the belt. when it
seems like it is tight enough that you can't deflect it by about 1/4" on the
vertical section, you have it tightened. then tighten the horizontal bolt.
The ac belt adjusts in a similar manner.(my compressor died long time ago,
and I have it unplugged so i've necver adjusted it. you can chek if it is ac
by turnin off the AC. (or, pull the plug fron top of the compressor under
the hood).