Gasoline - Geo - Prizm :: 1996 - Excessive Fuel Consumption And Squeaking

I have a 1996 Geo Prizm, with about 126K miles. I bought it last May, at around 120,000 miles and had no problems with it until recently, other than some minor issues with the power steering in November. In November, it started making a squeaking or grinding noise whenever I went around a sharp turn. It turned out that the power steering fluid was slightly low, so I added more and that was the end of that problem. But I also found out that the previous owner had put the wrong kind of power steering fluid in. Starting about 2 weeks ago, the car started making a squeaking or squealing noise. There would be no squeaking when I started the car, but then it would start when I turned. It is only audible when the engine is idling, and I'm not sure if it is squealing at other times, too.

I figured it was probably one of the belts, probably the power steering belt. However, I checked it and it seemed to be tight enough and did not appear cracked or glazed. A friend of mine who knows much more about cars than I do also checked the power steering, alternator, and A/C compressor pumps for me, and he said they seemed fine. About the same time the squeaking started, I noticed the car seemed to be burning a lot more fuel than usual. I have filled up the gas tank twice since then. Typically, throughout this winter, the car has gotten 33-36 miles per gallon. But on the last tank, it only got 25 MPG and it got 29 MPG on the tank before that. There has been no change in my driving habits to explain this. The engine also sounds slightly rough when it is idling, almost like a diesel engine, but no louder than the car usually sounds. My friend who checked the belts listened to it when it was idling, and he thought he heard a slight knocking sound, which I heard too.

I noticed no decline in performance: the car accelerates just as quickly as ever, and performs the way it always has. The power steering seems to function just fine, despite the squeaking. I thought that perhaps there was something wrong with the timing belt, and that might explain both the squeaking and the increased fuel burn. But I looked online at a few websites, and it sounds like timing belts usually don't show any symptoms when they are wearing out, they usually just fail without much warning. Also, when I bought the car, the previous owner said the timing belt was replaced at around 90K, so it should be fine for a while. I am at a loss as to what might be wrong with the car. I wonder if the squeaking and the increased fuel burn are caused by the same problem, or if there might be separate problems causing each.