I've heard that there is a company somewhere in Aus here that makes a kit car that uses Subaru running gear. My Dad is interested in this as we have a Subaru in the back yard. Anyone know anything about it?

Yep theres an ugly thing made in WA that uses an old subaru . Its kinda like a buggy . Cant think of the name at the moment but when I do I'll post it here.

There was talk that the new owner of Eureka Sports Cars in Sydney (formerly Purvis Eureka / Eureka Fibreglass Products of Melbourne) was going to sell kit cars based on a VW Beetle chassis with Subaru running gear.
The address is:

Eureka Sports Cars
PO Box 7322
Baulkham Hills DC NSW 2153
freecall 1800 301 357
email eurekasportscars@bigpond.com

Your other (cheaper) option is to keep an eye in the trader for a Eureka that needs a tidy up or an unfinished kit project and then convert over to a Subaru motor , like I'm doing.
Here is the enthusiast's web site
http://www.purviseureka.com/ 

There was also the Buffori's?

They use to be a VW base with VW motor but then they went to Subaru motor

If it's a buggy kit you were after then Sharpbuilt in Toowoomba is now doing the GS limo with a Subaru EJ20/22/25 option.
http://www.sharpbuilt.com.au/dunebug.htm 

As for the Bufori, as far as I'm aware they were never sold as kits, but as turn key vehicles and are now manufactured in Malaysia.

Here is another one http://carpoint.ninemsn.com.au/marketplace/UsedCarDetail.asp?ID=2383236&C...

I remember seeing an English kit on Top Gear about 3 years ago based on WRX running gear. Maybe search through their archives?

Squiz.....