Yes..........take it to the dealer!
Well..........assuming you want to try & do it yourself, I can't help ya' there. I really have no intention of doing a timing belt myself anytime soon.........but I can confirm a few things & maybe shed some light for ya'.
Yes, your g/f's TB is hitting the belt cover. Mine did the exact same thing at about 80,000 miles. FWIW, I rode it that way 'til it really started getting loud which was about 90,000. (So you know you don't need to run out & do it tonite or anything)
As for belt changing........I actually let the dealer do it just 'cuz I want to keep this car for a loooong time! I went & test drove an '05 LE and I swear, my '98 rides smoother.......(maybe read that more loosely?)........and I think the seating position in my '98 is MUCH better than in the '05. I dunno.......I just like the feel of the Gen 4's better. (And believe me, I expected to feel better in the '05.....it just didn't happen).
Another thing you could do is go to a local shop & see if they'll do it for less. Oh, by less I mean......the dealer wanted $350 to change the belt. A Big O Tires around the corner from my work that does all the work on our Toyota Tacomas, said he'd do it for $300 and use a "Gates" belt. In hindsight, I could've easily gone to him too, but I chose Toyota anyway.
While the whole front cover's off, you'll hear everyone tell you to change the following.........
Water pump
Thermostat
Front Cam seal
Front Crank seal
Valve cover gasket (not head gasket, but valve cover gasket)
and anything else I forgot, but you get the idea. Once you've got that whole front end apart, you might as well spend the extra couple hundred bucks & get ALL of those items replaced so you don't have to worry about 'em again for another 80,000 miles or so! (Peace of mind!)
I did it and I'm glad I did. I swear if I detail my '98, you could hardly tell it from new. Visually and mechanically. This thing runs like a Ninja and sounds like it too. (Note: I also prefer the sound of the Gen 4 2.2L's to the Gen 5 2.4L's w/ a chain!)