Ocotal, the principal city of the department of Nueva Segovia, is only 12 miles from the border with Honduras, where the contras retreat when they run out of U.S. funds. The rebels have attacked Ocotal twice, but not this day. Noon was growing indolently near in Ocotal.

Near the town square, two members of the Young Sandinistas July 19 organization stood on a frail wooden scaffold, capping their paint cans before beginning the day's siesta. They were carefully working on a mural of Eugene Hasenfus, Wisconsin flyboy.

The mural depicted the famous image of Hasenfus, his hands tied, being towed by a Sandinista soldier. Hasenfus was the cargo handler and the sole survivor of a plane the Nicaraguans shot down while it was delivering arms to the contras last year.

In a nation where symbols assume an enormous role in the manipulation of public opinion, Hasenfus had become a powerful emblem of Nicaragua's struggle against the imperialist power of the north. His grim features became about as ubiquitous as the Sandinistas' 1987 slogan, "All arms against the aggression." The government put Hasenfus on a billboard near the U.S. Embassy in Managua. Hasenfus T-shirts sold quickly to youthful Americans and Europeans who came to Managua by the planeload to groove on the Sandinistas.

And so, earlier this year, Ocotal got its own Hasenfus mural, an inspiration to workers, peasants and soldiers to get with the program.

A woman stopped to look at the mural taking shape on the wall. She was not inspired.

"What is this crap?" she said, gesturing toward Hasenfus. "Who is that supposed to be?"

She was middle-class, by the looks of her plain dress and the traces of a beauty-salon hairdo. She was not a worker. And she was not a campesino, a peasant.

"This is propaganda, isn't it?" she said, broadcasting her grievances. "The national government should bring better things into this town, not propaganda. The bad water is bringing death to our children, and they are using our money for crap like that."

Now life sprang to the street. About five men gathered near her. Some of them wore green fatigues of the Sandinista militia, the vigilantes of the revolution. They did not say anything. They did not look at her. They looked only at the mural as though they had just noticed it for the first time.

The woman looked at the vigilantes and walked briskly away. The men drifted back into the shade.

The street resumed drowsing and became murky with dust again.

"A revolution implies drastic and deep changes, and sometimes it doesn't suit some people," he said. "The main foundation of this revolution is the workers and the campesinos, and not the petty bourgeoisie."

With Barreda in his office were several other men - companeros, comrades. The men had been learning English, from the looks of the blackboard, upon which was written, "I want a beer. I need a beer." The comrades laughed when they were told these were important words to know in English. Barreda remained earnest.

"Sure, the mural is propaganda. The contras have several radio stations. They're spending a lot of money against us in ideological propaganda. That mural costs us only a few gallons of paint.

"Some people don't acknowledge all the things we've done for them," he said. "The problem is when people don't hear any shooting or any bombs and they forget that we have a war. They never think of the millions the government is paying for the war."

Barreda, the equivalent of a state governor, wore a turquoise No-Nukes T shirt and jeans (revolutionary Nicaragua is an informal place). The shirt revealed scars along his arms. The scars, he said, are where interrogators of dictator Anastasio Somoza Debayle's National Guard gave him electric shocks.

All they accomplished was to turn up the juice of his revolutionary fervor.

And now he's boss.

For, if the contras retreat to their camps in Honduras, they will take with them the Sandinistas' main explanation for why communities like Ocotal are such miserable places to live.

And then the Sandinistas will have to direct their attention to a force more potentially insidious to their revolution's longevity. They will have to deal with the discontented who stayed in Nicaragua rather than flee.

The Sandinistas acknowledge the grumbling, but say the U.S. aggression has prevented the government from delivering promised social benefits that should assuage the discontent. In some cases, health care and educational improvements have declined from pre-revolutionary standards, although the Sandinistas have made some remarkable achievements.

Eva Margarita Ortez, 80, who was spryly chewing the fat with her neighbors in Ocotal, said she could not afford an operation for cataracts. But a Sandinista commandante heard about her failing eyesight and arranged to send her to Cuba for surgery.

"He knew about my family's collaboration with the Frente," she said, referring to the Frente Sandinista, the Sandinista Front. "I live alone, and my sons aren't here, so it was a good thing they did for me."

But for every Nicaraguan who lauds the services, someone else complains he has received nothing but grief.

"The difficulty here is that the United States is putting up obstacles all around us," said Padre Agustin Toranzo, 46, the priest of Ocotal's Roman Catholic church. "I believe that the moment that the United States leaves us alone and we can put all of our tools to work, then we are going to march ahead stupendously. And we are going to advance much better than all the other countries around us."

It will be a daunting task. The war has taken a staggering toll in human and financial capital. Nicaragua's economic problems are deep, and so is the discontent that an ailing economy breeds.

But the difficulties the Sandinistas face in restoring confidence go deeper than rejuvenating the weak cordoba, Nicaragua's shrunken currency. The economic atrophy has also bred contempt for the government's attempts to construct an egalitarian system of distribution. So many people have turned to the black market that the underground economy threatens to outperform the official marketplace. The government inconsistently enforces the regulations. The few circumventors who get caught stew in hostility.

Reymundo Munoz Blandon, 52, a peasant with four acres of ground outside of Ocotal, is one such embittered man. While he was traveling to Managua last year, he said, the police confiscated the 20 pounds of beans he intended to sell on the street rather than to the government as required.

"They said this revolution was for the poor people, and I'm poor," said Munoz. "But I lead a wretched life."

More difficult for the Sandinistas to address, however, are the ranks of former allies, who have grown disillusioned at the government's stifling of dissent and entrepreneurship in the name of creating a new society.

Jose Ramon Paguaga Quinones, who is 42, smuggled arms for the Sandinistas during the insurrection and was one of five members of Ocotal's first governing junta. But tensions arose over the government's policies, and when the Sandinistas implied he was a thief, he quit the junta two years into the revolution. "I have many friends who participated in the insurrection," said Paguaga, "and all of them are disillusioned."

The Sandinistas tend to dismiss such dissenters as Somocistas - followers of Somoza - or contras. The contras are the reason, Sandinista leaders have said, they have been unwilling to relax restraints and accommodate dissent. But cynical Nicaraguans believe that for a long time to come, the Frente will maintain an atmosphere of crisis to preserve its embryonic political machine.

Who's to predict? The Sandinistas have demonstrated the ability to go many ways - flexible, dogmatic, compassionate, cunning. Their policies have often veered radically as they follow an undefined, intuitive path.

"The problem with the Sandinistas is they never made a decision who they are - democrats, socialists or communists," said Paguaga. "As of this date, they don't know who they are."

To the north and the south, the city is surrounded by mountains that are as lush as the plain is arid. The hills contain the wealth of the region, a fact that did not elude powerful Nicaraguans in the early 1800s, who craved money as much as Americans and Europeans craved caffeine.

In amassing the enormous coffee plantations, the patricians of Ocotal followed standard Central American practice and conveniently relocated the peasants to plots of cacti in the plains. A semi-feudal system developed in which the peasants, to subsist, became seasonal laborers on the land they had once owned.

The hills contained other riches as well. There was gold, which foreign companies mined with limited success. And there was timber, a species of pine called ocote, from which Ocotal derives its name.

The mountains have also protected various guerrilla bands throughout history, from the Indians who dared to resist the Spanish conquistadors to the Sandinistas of the 1960s and '70s to the contras of today. Nicaragua's history is a continuum of guerrilla groups resisting foreign domination on behalf of the nation's dispossessed.

The most influential of these mountain fighters was Augusto Cesar Sandino, who delighted in bow ties, ten-gallon hats and the baiting of Yankee Marines.

In 1927, the Marines were dispatched to Ocotal to prop up the Nicaraguan government, headed by the Conservative Party's Adolfo Diaz. Sandino, who was a member of the Liberal Party, took his forces into the mountains. He did not object so much to the gringos being in Nicaragua as he did to their taking sides. He wanted the Americans to observe neutral elections.

U.S. officials refused. Warring factions had exchanged control of Nicaragua's government so many times that it was getting downright difficult to conduct business. Besides, Diaz was a known and friendly quantity.

In an exchange of biting telegrams, Capt. Gilbert Hatfield, the Marine commander in Ocotal, called for Sandino to surrender. The guerrilla general responded with words that would become the battle cry of the current generation of Sandinistas - Ni se vende, ni se rinde - "I will neither sell out nor surrender."

"Nicaragua has had its last revolution," Hatfield declared.

A few days later, Sandino sent about 200 guerrillas to attack the Marines. They quickly took Ocotal. They chased a few Marines from the mule corral, where the Esso station now stands, and routed the Nicaraguan National Guardsmen, who were encamped where the National Bank branch is now located. They forced the outnumbered Marines and guardsmen to retreat to the garrison on the town square, which they surrounded.

The guerrillas would have won it there, had not Hatfield called in five airplanes from Managua, which bombed the rebels into disarray. And Ocotal became the first town in the Americas to undergo an aerial bombing.

Seven years later, after the Americans had left Nicaragua declaring that peace was at hand, Sandino was assassinated. The National Guard leader who ordered his assassination, Anastasio Somoza Garcia, soon became president, creating a family dynasty that ended with his son, Anastasio Somoza Debayle.

Sandino's name was relegated to the footnotes of Nicaraguan history books, always accompanied by the word outlaw. But in the 1960s, a small guerrilla movement named itself in his honor. When the Sandinistas took over in 1979, Sandino became a national icon.

But Sandino's political ideology is as elusive today as his guerrilla forces were in the 1920s. Each of Nicaragua's adversarial groups interprets Sandino's nationalistic statements to suit its purpose. Even the contras contend that they are the true adherents to Sandinismo. And the Sandinistas have virtually copyrighted Sandino's face. The general is painted on walls throughout Ocotal - sometimes abbreviated to only his ten-gallon hat.

Today, Sandino stares down from the vacant Marine barracks that he failed to seize in 1927, sharing the wall with Ernesto "Che" Guevara. "Sandino lives," the portrait states. But those who are unenamored regard the slogan with sardonic humor, characteristic of Nicaraguans.

"This guy Sandino must eat a lot," said a small shop owner in Ocotal, "because when Sandino was dead, we had a lot more food."

Paguaga's family long had been opposed to Somoza. In 1958, when Paguaga was 13, his father was involved in an aborted insurrection, and the entire family fled to a place in Honduras called, appropriately, Las Dificultades - The Difficulties.

In 1968, Paguaga moved back to Ocotal and established himself in business. He kept in touch with the underground movement and worked clandestinely in the insurrection of the late 1970s.

Like most Ocotal businessmen, Paguaga routinely crossed the Honduran border. To Somoza's enforcers, Paguaga appeared to be just another solid citizen going about his business. He was - serious business. He was collecting pistols and grenades in Honduras and carrying them past border guards in a concealed compartment in his 1967 Mercedes-Benz.

In 1978, the Sandinistas needed arms delivered south to Esteli, where they were planning an attack. With an acetylene torch, Paguaga cut open the 100 pound tanks used to carry propane. He filled the tanks with .22-caliber rifles and welded the tanks shut again. Unhindered by guardsmen, his Tropigas truck on its regular rounds delivered the tanks to a guerrilla safehouse in Esteli.

Such was the ingenuity of the allies who brought down the dictator. The FSLN - the Spanish initials for the Sandinista Front - was a small underground organization in early 1977 and factionalized over which strategy to use against Somoza. The group that prevailed (which included the man who would later become president, Daniel Ortega Saavedra) advocated an appeal to the growing disenchantment with Somoza among a broad spectrum of Nicaraguans: opposition leaders who wanted free elections, business people who wanted an end to the dictator's monopolies, Christians who were appalled by the injustice of the regime, peasants who wanted land, workers who wanted a fair shake. And, of course, the Sandinistas, who wanted a new social order.

"It was a phenomenal fight against Somoza," recalled Paguaga. "It was spontaneous. People sought out the Sandinistas to get rid of Somoza."

There were many people like Paguaga who worked underground to depose the dictator. Some carried arms, some carried messages, some concealed guerrillas on the lam, and some fought in the mountains.

Ocotal's Sandinista leader Barreda was urged to join the Frente by his parents, who were active in the radical Christian movement in Esteli, a city where the Sandinistas still enjoy strong popularity today. During the insurrection, Barreda's parents shielded Sandinista guerrillas in their house while Barreda recruited others.

In 1976, when Barreda went to Jalapa, a city on the Honduran border about 30 miles from Ocotal, an informer turned him in to the National Guard. He was arrested and tortured. An American, Barreda said, watched over the torturers, who drove one man crazy from electric shocks to his head.

Soon after his release - the National Guard was unable to prove anything - Barreda was arrested again for organizing the conservative department of Chontales for the Sandinistas. When he got out of jail the second time, he fought in the northern mountains under Cmdr. Bayardo Arce, one of the nine commandantes of the FSLN directorate, until the triumph.

Almost every Sandinista has some such story of struggle.

Padre Agustin, a Spaniard whom the Maryknoll order assigned to Nicaragua 13 years ago, worked with the Nicaraguan Human Rights Commission. A year before the triumph, he went to the mountains near Esteli, where he gave the guerrillas and their supporters food, medicine, clothing and "the Christian courage to continue forward in the struggle."

And Pedro Joaquin Ponce, 67, a tailor who is the secretary of Ocotal's branch of the Independent Liberal Party, returned from exile in Honduras in 1977 to help the Sandinistas distribute arms and propaganda. After the triumph, Ponce was named to the junta governing Ocotal, along with Paguaga and three other men.

On Oct. 22, 1979, more than 20,000 people from the surrounding area crowded into Ocotal's baseball stadium (which the Marines had built when they weren't hunting Sandino) and acclaimed the new government.

Those were the glory days. "At the beginning, it was beautiful," said Ponce. "It was beautiful."

But then the coalition that brought down Somoza began to disintegrate.

"Outside of the country, we Nicaraguans were like this," said Ponce, grabbing his collar. "My shirt was your shirt. But inside of Nicaragua, we fight like cats and dogs."

"In the time I was in Honduras, before the insurrection, we had a three day seminar in which the Sandinistas discussed the purposes of the fight and what the results would be," Paguaga recalled.

"In the first place, we were going to stop the exploitation of the campesinos. I agreed to that. In the second place, we were going to confiscate the properties of Somoza and the National Guard, which they stole from the campesinos. And I agreed to that also."

And they agreed that "everybody would participate" in a democratic government. They failed, however, to define democracy.

Ponce and Paguaga viewed democracy as it is understood in the United States - the people elect local, regional and national governments.

The Sandinistas, however, believed that because they were the spark of brilliance behind the revolution, they were the "vanguard" of the people. To them, democracy was a matter of setting up a system of organizations representing different interests, which would report their concerns up a hierarchy to the FSLN's national leaders.

In theory, everybody would participate. The Sandinistas went about creating organizations of all kinds: labor unions, artists' guilds, groups representing peasants, women, Christians, businesses, health workers, veterans, children, mothers of heroes and martyrs - you name it, there was a group for it.

Although most of the groups were ostensibly independent, they could not be distinguished from the Sandinistas. And the Sandinistas could not be distinguished from the government. They were all financed by the government. They even talked the same, using the same revolutionary rhetoric.

And even though the Sandinistas eventually held national elections in 1984 (which they handily won), the dissidents reasoned that it would be mighty hard to defeat the party when the nation's police force, air force and army all bear the name Sandinista, not Nicaraguense.

When Ponce and Paguaga were members of Ocotal's governing junta, the Sandinistas had only one of its five representatives, but the junta had little authority. The FSLN dominated through the expanding bureaucracy and the organizations, and didn't appear interested in sharing power.

Everything became politicized, and much of the government's actions appeared at cross purposes.

While the Sandinistas were launching their much-lauded health and vaccination campaigns, they gradually fired most of the nurses at Ocotal's hospital (formerly Somoza General Hospital) since they were nuns and conservative. "It was obvious they didn't want the nuns to be working there," said Ponce.

To acquire more land for cooperatives and state farms, the Ministry of Agrarian Reform began confiscating property other than that belonging to departed Somocistas. Of the 10 coffee mills that once operated in Ocotal, the government now owns seven.

And businessmen watched the government's "mixed economy" so restrict their ability to operate that the incentive was not to produce more but to produce just enough to avoid the appearance of idleness, which the government could also use as a pretext to confiscate.

"All the hardware stores except this one closed down," said Favio Peralta, who bought Ramos Hardware when Alfonso Ramos left the country in 1982. The store's shelves are empty except for the few tools the government sends him and the few dusty boxes of auto parts that remain from before the revolution. And yet he has seen a well-stocked government hardware store in Esteli. "I think they're trying to eliminate private businesses," said Peralta.

As businesses closed, Ocotal was becoming a bleak place. The Segovia Theater rarely showed movies. The only bookstore in town specialized in such titles as The Workers' Control and the Nationalization of Industry. The largest lumber mill became a military base.

And the government began attacking those who complained. "They wanted me to go and paint graffiti on the houses of people who were supposedly Somocista," said Paguaga. "I said that wasn't the way to get people to support us."

The dissidents came to view even such programs as the ballyhooed literacy campaign as political indoctrination. "They barely taught people how to write their own name," said Munoz, the peasant. "And after that, they taught them how to write Sandino's name on the walls."

Independent groups were prohibited from organizing fund-raising events without coordinating efforts with the Sandinista Defense Committee, whose neighborhood watch groups are the most basic element of the Sandinista hierarchy.

After one such fund-raiser for the Red Cross - which Paguaga serves as president - government officials accused Paguaga of stealing, although Paguaga says he saved the government 100,000 cordobas. "We were accused of working outside of the legal structure," he said. "So I resigned from the junta." He was never charged with anything.

When he resigned, the critical feud over the Lions Club - one critics see as epitomizing Sandinista relations in Ocotal - was only beginning.

After the triumph of 1979, the Lions Club members wanted to reorganize the group, which had suspended activities during the insurrection. So they built a new clubhouse.

Sandinista officials said they disapproved of the expenditure for such a narrow purpose. "But because I was part of the government, they didn't confiscate the clubhouse," said Paguaga. "Instead, the Lions lent it to a poor barrio as a neighborhood center."

It became a party center. Drunks trashed the clubhouse, so the Lions asked for its return. Instead, the government turned it into an office for customs.

Paguaga acknowledges that customs improved the building, but then the Ministry of Justice wanted the club. Before the Ministry of Justice moved in, however, the Ministry of Education staked a claim to the building's roof of galvanized steel, a material in perpetual short supply. One day, the Lions Club roof disappeared. It reappeared on a new addition to the Nuclear School. "So we went to the Ministry of Education, and they said, 'Yes, we took your roof. What do you want to do, put us in jail?' " said Paguaga.

The clubhouse stood empty and roofless for a year until the Lions decided to convert it into an orphanage. Several days after they began hammering, a brigade of international workers came and said they were authorized to rebuild the house into a home for mothers visiting their sons in the military.

"And they destroyed it," Paguaga said. "They took the toilets, the wood - everything - and used it elsewhere.

"And that's how the Lions Club disappeared."

To the Sandinista critics, the Lions Club incident illustrated the essentialdivision between Ocotal's traditionalists and the new generation.

"I think the reason they destroyed the club was because we were helping people - we're a service organization," said Paguaga. "They want to show the people that they are the only ones who help people."

"There are many people who, because they gave a little support to the revolution, believe that they would get privileges and benefits under the new government," said Barreda. "The revolution doesn't give privileges or benefits to anyone."

Padre Agustin is more blunt. He said that the businessmen and shopkeepers yearn for the old days, "when they were like vampires or leeches sucking the blood from their brothers."

That's Nicaragua, where ideological fractures still pervade a society that has lost much of its wealthy and middle classes. The polarization affects everything, even the Roman Catholic Church.

In few other countries does a parish priest like Padre Agustin publicly disparage the church's leader, Cardinal Miguel Obando y Bravo. "Even if he is the cardinal, he doesn't have the right to lie," the priest said of Cardinal Obando, a hero of the anti-Sandinista opposition.

Cardinal Obando, too, supported the revolution, but according to Padre Agustin, he became hopelessly aligned with "reactionaries and the bourgeoisie." "The bishops denounce whatever abnormality, whatever error that the Sandinistas commit," said Padre Agustin, "but they never denounce the barbarities done by the contras."

This is a common Sandinista lament, that the opposition and the United States hold them to impossibly strict standards. There is some truth to this. When compared to neighboring countries, whose transgressions the U.S. State Department rarely criticizes, the Sandinistas often appear to be the cachorros - puppies - they say they are.

Why not look at the positive aspects of the revolution, say the Sandinistas, the health and educational improvements, the new sense of freedom that some people have found since 1979?

"In truth, it is difficult to obtain stability in a country like the one we inherited - in economic ruins, nearly destroyed and with grave social problems," said Barreda. "And to have succeeded in stabilizing it militarily and to have begun stabilizing it socially has been a great task. Only with the support of the people have we achieved so much."

On a Sunday night "vigil for peace," where about 30 people gathered around a bonfire of ocote and prayed with Padre Agustin "for understanding between governments," Eva Sofia Olivas de Marin said that Ocotal, despite its physical deterioration, has improved in intangible ways.

Her brother went to the university in Leon, she said, although he could not have afforded the education before the revolution. And she said the church has improved, too, when Padre Agustin replaced a priest who preached "a vision of Christ that perpetuated the exploitation of the poor."

Many things have been achieved. The Sandinistas built a prenatal health center, cheerfully painted on the outside with a mural of Sandino and other Sandinista martyrs looking down from the clouds on children. Americans from Santa Fe, N.M., in a personal act of friendship to counter their government's policy, are now building a home for handicapped children on the edge of town.

And because some government projects were successful, they became contra targets. The contras destroyed four grain silos and two coffee-producing facilities. In 1984, they attacked the government lumber mill and Radio Segovia, the government radio station.

At La Unidad, one of the cooperatives the government has established in the mountains around Ocotal, 25 formerly landless men now run a coffee plantation. But they spend so much time guarding the farm from contra attacks that most of the labor is done by peasants hired part time.

Barreda acknowledges only reluctantly - and adding a note of optimism - the deterioration of Ocotal. "We have gone backward a little," he said, "but this year we are going to complete a new agricultural complex." They're also working furiously to expand the town's water system to the city outskirts, which has swelled with 7,000 refugees from the war.

"There are those of us making a sacrifice on behalf of the revolution," said Dr. Marta Reyes Alvarez, 25, the assistant director of Ocotal's health clinic, which physicians have left for private practice to be able to make a living. But even though Reyes' salary of 65,000 cordobas does not buy her a pair of Nicaraguan blue jeans, she prefers to work at the clinic for the poor.

Barreda said he knows about sacrifices for the revolution. In 1983, his parents were kidnapped by the contras about 20 miles from Ocotal, interrogated brutally, and then executed.

"We are committed to this struggle, yes?" said Barreda. "For this, my mother and my father and thousands of people have given their lives. They have given their lives for the people who want a better life."

Last year, Diaz resigned as the credit manager of a division of the Ministry of Agrarian Reform. He said his superiors routinely hoarded supplies for their friends, while lines for the same products formed in the streets.

"There shouldn't be a privileged group," he said, describing how officials sold on the black market powdered milk that was impossible to find in the stores. In another instance, he said, authorities diverted 2,500 pieces of galvanized roofing sheets assigned for peasant housing. Nineteen hundred pieces were used to complete a baseball stadium, he said. The rest were distributed to construction workers.

When Diaz complained, he said, he was transferred. "Everybody should have to suffer the consequences of the shortages," he said. He now paints signs for a living, but he is trying to emigrate with his family to Montreal.

Perhaps as damaging as the contras is the loss of confidence of people like Diaz, a loss that is destroying the country from the inside out. They do not leave the country to join the contras. To Diaz, the contras represent the system he was fighting against. Revolutionaries do not draw monthly salaries in American Express Travelers Cheques.

His dilemma, and that of other Nicaraguans losing hope in the Sandinistas, is that there are no appealing alternatives. In Nicaragua, no matter where one stands, life is always a struggle.

Paguaga and Ponce, for instance, continued to run afoul of the government after they resigned from the junta. In 1983, from a businessman leaving the country, Paguaga bought a block of property containing the Hotel Frontera, a Shell station and a few rudimentary houses. With inflation eroding the cordoba, the price was cheap enough.

But inflation was also eating away at his employees' salaries. He offered the workers raises, but the Ministry of Labor said they could not be paid above the government-prescribed maximum wage. Paguaga instead lent his houses to his employees at no cost.

When inflation cut deeper, the government again refused wage hikes. "They consider that I'm competing with the government over salaries," Paguaga said. He and his 25 employees went to the Ministry of Labor and protested, which embarrassed the Sandinistas into making an exception. In lieu of raises, Paguaga was permitted to give 18 percent of the profits from the hotel and the gas station to the workers.

The government, meanwhile, has blocked his plans to renovate while it investigates his purchase of the complex four years ago. "It has been a tremendous fight," Paguaga said. "All the investments I've made at this hotel have been without help from the government."

Ponce had it a little worse.

One of his sons, Lester, fled to Honduras in 1985. He had fought with the Sandinistas against Somoza, but when he later became critical, they twice jailed him, calling him a contra intelligence officer. The Hondurans suspected he was an agent for the Sandinistas. They threw him in jail, too.

Once the regional peace plan was signed, Lester requested amnesty, admitting, the Sandinistas say, that he had been trying to set up an "internal front" for the contras in Ocotal. Contra leaders say they refused to let Lester join them because he was untrustworthy. He lived as a refugee, they say, before his return to Nicaragua.

Because of Lester, the Sandinistas jailed Ponce for eight days last year. Then they kept him under house arrest for six months.

There is little for Ponce to do nowadays - Nicaragua's 4-year-old state of emergency limits his Independent Liberal Party's political activity. He applied for a visa to visit his children in the United States, but the U.S. Embassy rejected him because as a junta member in 1982 he visited Cuba. He spends most days sitting alone on the curb in front of his house.

"I never thought that I would have fed the birth of a raven that would come back to pluck out my eyes," he said of the government.

To the Sandinistas, the disenchantment is a delicate issue that raises the prospect of an indelicate response. While they acknowledge that the thousands who have fled Nicaragua represent a tremendous loss of human resources, the alternative is to compromise the higher principle at stake, the Sandinista revolution.

"It's bad in one aspect, and that's this flight of brains, no?" said Padre Agustin. "But it isn't bad if they are really going to be ill-mannered about the revolution. It's better they leave than they obstruct the revolution. And they are going to give a bad image to the revolution, true?

"It is preferable that people who aren't in agreement with a process that is more social, more egalitarian, more brotherly between everybody - well, if they aren't in agreement, then they should go."

Barreda agrees.