Either more good artists are going to jail these days, or the jails are producing better artists. "Culture From Inside," the new exhibition in the lobby of the General Services Administration, 18th and F streets, is the best prison art show to date.

"It has released a lot of tension and brought out a lot of talent." said Robert Spear, teacher-counselor at the Main State Prison. He was talking about CULTURE (Creative Use of Leisure Time Under Restrictive Environments), the first federally funded program to teach visual and performing arts, creative writing, photography and crafts to inmates.

From the thousands of paintings, prints, photographs, pots, poems and productions generated by 4,000 inmates of 54 correctional facilities, 200 of the best have been selected for the current show.

The subject matter of the works underlines an obvious yearning for places and circumstances on the "outside" real or imagined.

The most extraordinary painting in the show is by Glen Ray Holscher, clearly a highly trained artist before his incarceration in Minnesota. In his oil "Shades of Pygmalion." he portrays himself in the grand manner at his easel (in his cell) palette and brushes in hand. On one side, a nude model poses on his cot; on the other, the finished "painting" sits on an easeal.

"Snow Owls," though almost photographic, is the pure invention of an able painter, David Fox, now at the North Florida Evaluation and Treatment Center for the Criminally Insane. Anthony Marez shows talent and promise in two abstracts with violins made at the St. Cloud, Minn., Reformatory, while Vernon C. McKee renders a fine self-portrait that also includes a portrait of a young woman.

There are several poignant works that focus on the pain of separation.

A painting by a male inmate shows a child asleep with a teddy bear. One of the most touching, however, is a scrapbook called "Memories of Yesterday" by Sherry Thomas, recalling the birth of a child.

But there is more than visual art. James Lewisohn, poetry professor at the University of Maine before he was convicted of murdering his wife five years ago, has been teaching courses to follow inmates and has published a handsome volume of inmates poetry. Lewishon recently received a grant from the National Endowment for the Arts.

"One guy can play" "Moonlight Sonata" after only six months of piano lesson!" boasts Ellen Northrup, project director for Alaska. Her group of artists from Eagle River Correctional Center, is unique in that "not one has had any art training." The Eskimo carvers, however, were obviously born with talent they had never exercised before, and their jewelry, brass boxes and soapstone carvings, particularly Philip Alexie's wonderful "Blanket Toss," are among the most astonishing objects in the show.

"We have mixed emotions when they go," says Northrup. "The pianist still comes back for his lessons, though he has been released." Northrup has also helped an artist to open a jewelry store in Valdez, terminus of the pipeline. "If you teach a guy to make jewelry out of scrap, which we did, he won't have to steal to get it."

"I think the program is fantastic," added Northrup. "It's changed their whole lives, and the way they look at themselves."

The exhibition coincided with a meeting of CULTURE directors, here for a year-end appraisal of the program, which the Law Enforcement Assistance Administration funded at $1 million and funneled through the American Correctional Association. At Monday's opening, LEAA announced the project would be re-funded for another year, but at a lower level, $800,000.

"We now won't be able to fund individual projects at the old levels," said Margo Koines, assistant director of CULTURE, "and some projects won't be re-funded at all if we are to achieve our goal of stimulating new projects. But usually LEAA only gives seed money for one year, so we're pleased that they've funded us again at all." The rest will have to be raised from state, local and private sources.

The works in the exhibition are for sale through Lou Jones at the Foundry Gallery (296-0545) at 2121 P St.

The show is open Monday through Friday, 8 a.m. to 5 p.m. through July.