1996 Subaru Legacy L Wagon: Handbrake button is stuck in shaft.

Most likely you have two problems. The park brake cables can rust under the car, and jam, usually where they pass into the brake assembly. Replacement is required.

The park brake assembly (drum or drum-in-disk) are more or less the same, and small internal bits (springs and clips) rust and wear out.

Replacing the cables requires the brake assembly to be opened up for inspection anyway.

Driving with the brake engaged has likely broken a part of the system as the parking brake is designed to not allow the car to move. You should (or have a qualified tech) inspect the parking brake system and repair the problem.

Always check it with the engine running, and put the gearbox into Park. and the handbrake ON, Make sure that the gearbox is warmed up to normal operating temperature first. A drive of a couple of kilometres ( or about a mile and a half, depending where you live) should do it.

The a/t switch is a traction thing for snow and ice, or mud, whatever, just like the winter driving mode on older cars, it stops low gear from engaging and locks up the rear end for traction, or something like that. Not sure how it works.

could be a bent parking pawl from engaging park while the vehicle is still moving. The park setting on an auto pushes a steel rod into a hole in the gearbox mainshaft so if you engage park when you are still moving it will eventually bend the pin and it will stick. You may be able to use force via a bar, at the gearbox end where the shift cable connects, while an assistant rocks the car back and forth. If you get it free, do not use park any more, instead use neutral and the handbrake.

It appears if you remove the pin in the lower in of the handle, you can remove the spring and then re-insert a new button. Try and get this part from a junkyard before the dealership....might be a cheap part from them or maybe they want $50 for it....either way, you should be able to replace this yourself.

you can just replace the knob get one from the Subaru dealer or get one from a junk yard if they wont sell you one by its self.

The Dipstick is on the driver side right next to the starter and yes you also put the fluid in there.

If the '04 has the same setup as the '00, then there should be a switch on the top of the steering column that will turn the parking lights on or off even if the key is removed. Hope this helps.

Seems like you have a seized gearbox. If the engine can turn on the starter when you depress the clutch that will confirm the problem lies in the gearbox. One outside possibility is that there is an inboard handbrake on the Isuzu. An inboard handbrake is commonly located at the back of the gearbox on the drive shaft. If this is the case it could be the handbrake jamming.