This is my first post other than my intro post... and sadly its bad news.
I bought a used 05 2.5 NA liberty about 2 months ago from a dealer. Did all the right things and had an independent mechanic check it over it and give it the thumbs up as well as looking at the service history etc.
Last week it developed a bad knock

http://www.youtube.com/watch?v=SvxaR7HSmWc
The dealer's mechanic said it was likely a spun bearing or rod knock.. And depending on how much the oil has been contaminated by that, it will require either a full rebuild, or another engine. (Both funded by the dealer as its under warranty.)
Has anyone on these forums gone through a similar deal? Usually Subaru engines are tough as.
Also, I'm not sure what the dealer will do. If they get another engine, I'm worried they are going to get a thrashed engine from a yard somewhere with similar km's and stick that in there. In the end, they will do whatever is cheaper for them right?
What are my rights in this case?
The whole thing is a bit of a bummer.
Cheers guys! Look forward to getting some advice,
Mike