Ever since George Washington's step-grandson, George Washington Parke Custis, wrote two plays on the American Indian, "Pocahontas" and "The Indian Prophecy", playwrights have been dramatizing them.

For Edwin Forrest, the first American actor to sponsor a play-writing contest, John Augustus Stone's "Metamora" of 1829 provided the actor with a 40-year vehicle about the "noble savage" who refuses "to forsake the home of his fathers and let the plough of strangers disturb the bones of his kindred."

Now the Folger Theater Group has the premiere of Christopher Sergel's "Black Elk Speaks." The play's distinction lies in its source, the book John G. Neihardt first published in 1932 and, which lately has had a resurgence among young students, especially after Dick Cavett's televised interview with Neihardt before the author's death at 92 some three years ago. (The book is available for $1.95 in Pocket Books paperback).

Neihardt's variation on the long-lived dramatic theme of the American Indian is distinguished by its mystical aura, a grave, permeating sense of other-worldliness. This is the very quality missing in Sergel's play and Jonathan Alper's staging.

The failure is understandable enough and, in dramatizations, quite common. For explanations, it is assumed, must be made, references tied down and any stage essentially is earthbound. It might have been better to take some knowledge for granted and accent Black Elk's eerie experience.

WIthout this mystical quality of the young Indian conversing with his grandfathers, who represent a blood line back into the mists of time, Sergel's play becomes dominantly a recitation of the white conquerors' broken promises. Reiteration follows reiteration so ploddingly that one mutters "enough already."

One cannot fault the players (some of whom are Indians) nor Alper's ingenuity with his small stage. The music of Philp J. Lang and the movement and native dances devised by Virginia Freeman and Jane Lind are necessity confined by the inherited limitation. Films and outdoor dramas have taken the same trips over the same simplistic highways.

The costumes by Karen M. Hummel have the virtue of seeming inevitable and Clayton Corbin Portrays the title role with passionate skills. In the cast of 19 for some 54 roles, there are other sure characterizations by Maria Antoinette Rogers, Carlo Grasso, Toni Wein, Carlos Carrasco, Jane Lind and Carl Battaglia.

But the mystical distinction of Black Elk's "great vision" - the youth lured to the mountain top "above the whole hoop of the world" and the timeless, visionary, ritualistic aspects of Neihardt's record - soars above dramatic reach.

Performances are Tuesdays through Sundays, with reservation at 546-4000.