I'm not sure what a code 16 on engine start would be... the list I have just goes to 15. It could be two
codes together... is it a steady blinking? Maybe if you put it into diag mode, it will give you more data.
I posted this on the USMB awhile back:
(It did work on my '90 Legacy, BTW)
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I pulled this off the The Subaru SVX FAQ (home.mgfairfax.rr.com/svx/faq/index.htm) so I don't know how much this will apply. I don't know if it will work on a(ny) Legacy and I havn't had a chance to try it on my car.
Diagnostics
The "Power" light indicates transmission codes. The following self diagnosis will show any fault codes for the transmission.
To perform the self diag test for EXISTING problems
1) Warm up engine by driving at speeds greater than 12mph.
2) Stop vehicle and turn ignition switch OFF.
3) Turn ignition switch ON and make sure POWER indicator lamp comes on.
4) Turn ignition switch OFF.
5) Move selector lever to D and turn manual switch ON.
6) Turn ignition switch ON.
7) Move selector lever to "3" and turn manual switch OFF.

Move selector level to "2" and turn manual switch ON.
9) Move selector lever to "1" and turn manual switch OFF.
10) Partially depress accelerator pedal (to turn idle switch off).
11) Check code as displayed on POWER light. Blinking once every 1/4sec is normal.
To perform the self diag test for PREVIOUS problems
1) Warm up engine by driving at speeds greater than 12mph.
2) Stop vehicle and turn ignition switch OFF.
3) Turn ignition switch ON and make sure POWER indicator lamp comes on.
4) Turn ignition switch OFF.
5) Move selector lever to "1" and turn manual switch ON.
6) Turn ignition switch ON.
7) Move selector lever to "2" and turn manual switch OFF.

Move selector lever to "3" and turn manual switch ON.
9) Move selector lever to "D" and trun manual switch OFF.
10) Partially depress accelerator pedal (to turn idle switch off).
11) Check code as displayed on POWER light. Blinking once every 1/4sec is normal.
Trouble codes:
11 Duty solenoid A
12 Duty solenoid B
13 Shift solenoid 3
14 Shift solenoid 2
15 Shift solenoid 1
21 ATF temp sensor
22 Atmospheric sensor
23 Engine revolution signal
24 Duty solenoid C
25 Engine torque control signal
31 Throttle sensor
32 Vehicle speed sensor 1
33 Vehicle speed sensor 2
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