Surg - if you want AWD and acceptable (not great) mpg, try looking at Subaru. I get around 30 mpg with my Impreza. They go from 90-10 to 50-50, so you always have some power going to the rear wheels, that's why the mpg isn't fabulous. If you want 100-0 and 50-50 (with no gradations, and no LSD - so watch for windup on corners) take a look at the mid 1980's Subaru GL. There are still some around, but you'd have to get out of the salt to find one.

Jeep is doing a diesel, and their warrantee covers B100. Kind of expensive, though.

Last time I looked, the Element came with an AWD option. But only on the automatic, so that tossed the Element off my short list when I was car shopping.