P0420 Fault Code: Diagnosis and Fixes for 1999 Subaru Legacy 2.2L

My 1999 Subaru Legacy 2.2L has been experiencing a loss of power, sluggish acceleration, and significantly reduced fuel efficiency—dropping from my usual 27 mpg to only 22 mpg. I initially had the fuel injectors cleaned and replaced the fuel filter, which provided temporary improvement before symptoms returned. After adding another bottle of Chevron Techron to the fuel, engine responsiveness improved briefly but deteriorated again. The check engine light then activated, displaying code P0420. I visited a local mechanic who recommended replacing the front catalytic converter at a cost of $700. I was hesitant, as I believed the P0420 code might stem from another underlying issue rather than a failing converter. I replaced the spark plugs—Autolite Platinum type with 80,000 miles and a worn gap of 2mm (despite their advertised 100,000-mile lifespan). After this change, engine power returned, but I began noticing noticeable misfires during idle (no issues under acceleration) and occasional exhaust popping. I then replaced the ignition wires, which eliminated the misfiring. The vehicle now runs smoothly with restored power and fuel economy. However, the P0420 code persists. Additionally, I’ve observed black carbon residue dripping from the exhaust pipe—this is a concerning sign. Given these symptoms, should I still proceed with replacing the catalytic converter? Any insights or diagnostic steps would be greatly appreciated. Thanks, Tony.