I have heard you can remove a fuse to disable AWD and improve mpg when AWD is not needed. Is there any truth to this?

I have a 1997 Subaru Outback Limited wagon. I was having major issues with torque binding but didn't have $1k to fix it, so I called a couple of local Subaru dealers and asked their in-house mechanic if there was any issue with putting the fuse in to override it into FWD... both said no. They both said there was no safety issue, nor would it do any type of damage to the car. They said the only issue is that it might wear out the C-Duty Solenoid faster than usual. One of the mechanics said it might happen in 5 days... might be 5wks... might be 5mos or even 5 years... no way of knowing. It was just the luck of the draw.

I've now had it in FWD mode for almost 11mos and there hasn't been an issue one.

Yes, you can disable the 4-wheel drive, but it is not advised that you do so. First, the vehicle is engineered as with an AWD drivetrain. When you disable AWD, you are moving the entire load of the vehicle to the front drivetrain, which is engineered to take about 40% of the total load. You are also driving a vehicle designed with handling characteristics of an AWD in FWD mode. Finally, you are not likely to see any significant difference in fuel economy, as you are still carrying around the mass of the rear wheel drivetrain. The Subaru transfer case is not designed as a direct lockup, like a standard 4-wheel drive setup; it doesn't work against you when it's engaged. Like most things, it's best not to second guess professionals who used years of formal training and experience to design your car.

Yes, this is true, but you should only ever do it if you have to tow the vehicle with the rear wheels on the ground.....which you should avoid at all times.

Yes this maybe true but it will mess up the computer if your car was designed to be AWD at all times