Broken timing belt

This is a fairly common repair for a lot of brands. Any engine can develop a leaking head gasket. That in itself is a big repair. Replacing bent valves just requires a little extra time beyond that head gasket. Unless something catastrophic happened and the cylinder head has to be replaced, or some pistons were broken, the entire engine doesn't need to be replaced. Here is how to replace the timing belt

https://www.2carpros.com/diagrams/subaru/impreza/2004

Please let us know if you need anything else to get the problem fixed.

To add to Doc's answer. Piston damage would be the only reason to change the whole engine and that is rare but the bent valves themselves can prove to be very costly. This engine has 4 valves per cylinder and although they won't all be bent, there may be a large number of them bent and I've seen some sell for $15 or $20 each plus installation and grinding of the good valves.

Recheck timing marks should be next step
I have seen it that piston would hit the valve and bend it
do a compression test (if and after rechecking the timing marks )

Ensure timing marks are aligned. Using a press, align holes in belt tension adjuster rod and adjuster body, and push rod into body. DO NOT allow press pressure to exceed 2205 lbs. (992 kg). Install a stopper pin with a diameter of .059" (1.5 mm) through holes in adjuster body and rod. See Fig.
Temporarily tighten mount bolts while tension adjuster is pushed completely right. Install belt tensioner. Ensure belt direction of rotation is correct.
Install timing belt, being careful not to move sprockets. Install belt idler No. 2 and belt idler. Loosen tension adjuster mount bolts and push tension adjuster completely left. Tighten adjuster mount bolts.
Ensure the marks on timing belt and sprockets align. See Fig . Remove stopper from tension adjuster. Remove rocker covers and ensure valve lash adjuster does not contain air. To complete installation, reverse removal procedure. Adjust drive belts to proper tension.

Here is a tip: Make sure you use the mark on the reluctor at the rear of the crank surface. Some have another small mark at the front not that far off. The pictures under the engine heading are a little better. This guide can help.

https://www.2carpros.com/diagrams/subaru/impreza/1993

Check out the diagrams (Below). Please let us know if you need anything else to get the problem fixed. Also make sure the #1 is on its compression stroke by removing the plug and inserting a compression gauge.

Cheers