Carlos Paez-Vilaro is a romantic man. For 15 years he has been building a fantastic castle undulating along a seaside cliff in Punta del Este, Uruguay. Some walls have almost sexual shapes. A spire is tapped with a moon. The pool reflects the stars. A circular window is shaped to pull in moonlight.

Niches enshrine votive objects. Surfaces stretch to receive African masks. A window shaped like a Picasso plate is an architectural echo.

Everywhere the great circling terraces envelop and protect. Not since Antonio Gaudi built fantasies in Barcelona has such a myth become manifest. Casapueblo is intended, he says, as a landing field for UFOs.It is his home, and usually home for 40 or so friends who come to visit and stay to live.

Each January and February, writers, artists and musicians from all over the world come to the castle, atop a high cliff above the bay in Punta del Este. Guests and hosts make a great fiesta of art a sort of mystic incantation of culture against the forces of darkness.

Paez-Vilaro, at 54, is also a practical man. His castle is not built of sand, though it looks like it. It is made of rough brick forms, with wet cement smoothed over by hand, the workers using gloves made out of old tires, a Paez-Vialro invention. The method works well because it is easily taught to the local fisherfolk. And because he is a practical man, as well as Uruguay's best-known artist, he has worked out feasible ways to carry his fantastic ideas to other parts of the world where cliffs, bays and willing fisherfolk are not in vast supply.

Paez-Vilaro is currently in Washington as a gift to the city for sex months from the Organization of American States. His salary as "artist in action" is sort of a thank-you present to the city for serving as host to the OAS.

Paez-Vilaro has been here before. He painted the magnificent mural in the tunnel of the Pan American Union Building, a 160-foot work called "Roots of Peace," probably Washington's least-seen masterpiece.

His new murals will be much more visable. He hopes that they will transform a city "full of energy but without color" into a kaleidoscope of brilliant hues. Specifically, he has begun work on at least three, and more likely four (he's a fast worker) outdoor murals, planned to ornament the otherwise faceless gray sides of buildings.

In each case he will work as he often does: The design and outline is his, the color-by-the-number work will be done by other artists, some of them students. He will teach them how to prepare walls for murals and other techniques so they can go on to do others.

First to be completed likely will be a community building in Adams Morgan. The Madam's Organ art group will work on the 15-by-30-foot mural. A second is planned for the side of an apartment building behind a gas station near by. This project will be executed with the help of Smithsonian Associates class on mural painting.

The other sites are not yet set, but Paez-Vilaro is talking to owners of inkers Restaurant in the West End. "I will be glad to do many more. I am in the public domain," he said.

He has already finished a solo effort, an indoor mural, at the Grupo Artistico Latino Americana (GALA), the new theater at 2319 18th St. NW He is working with the Spanish Speaking Senior Citizens Center at Adams-Morgan in painting a mural on the walls there. He plans to join with artists from Duke Ellington Arts High School to paint murals inside the Center for Inquiry and Discovery, the children's museum at Lovejoy Elementary School, 12th and D Streets NE.

In his spare time in the two months since he's been here, Paez-Vilaro has covered the walls of his rented apartment with dozens of paintings, on canvas, all in the flat figures, bright colors and hard lines that are characteristic of his work.

Paez-Vilari, as he once said, is painting murals that will be a belt around the world. He has executed murals inside and out of buildings in the Americans, Europe, Africa (where he worked with Dr. Albert Schweitzer) and Tahiti. His great ambition is to paint a mural in every hospital in the Americas. "Color relieves pain," he says.

Paez-Vilaro believes that color ia a healer in many way. "Color is an injection of peace. Color quiets fears. Color brings calm to streets where there has been much crime."

Great outdoor murals are, of course, no novelty in Germany, Switzerland, Austria and other European countries. Old ones, kept in good repair, new ones with contemporary motifs, brighten blank, windowless walls in many cities and villages of Europe. In the United States, our only wall murals have, by tradition, been outdoor advertisements (chewing tobacco signs on barn walls the principal contribution to the genre.

For decades, with a less-is-more motto, ornamaentation has been looked upon as tacky, unsophisticated, old hat. But with architectural verities facing the wrecking balls of criticism, people are thinking again about beauty, vareity, laughter in architecture.

Architect Bill Lacy, head of the American Academy of Rome, is fond of saying "what doesn't happen by accident, happens by design." Large, plain, boring surfaces such as cement-faced buildings, sides of New York subway cars, and keep-put-fences, cry out to the graffiti artists of the felt pens. Graffiti is drawn wherever the easel of blankness invites it. Paez-Vilaro suggests we not try to keep the child in all of us from drawing on walls, but that we organize it into works of art.

In short, Paez-Vilaro wants to paint the town red, and green and blue. When he finishes the walls, he wants to start on the roofs. "The airplanes too, need cheering up." he said.