Two years ago New York's Central Park -- which has been called an achievement of American culture equal to "Moby Dick" and the invention of jazz -- seemed beyond repair.

Now there is hope for a renaissance. Yesterday, two of the park's long-deteriorated fountains started gushing. The Sheep Meadow is green for the first time in decades. Mounted rangers are proudly trotting on the bridle paths.

The mastermind behind this gradual, painstaking restoration of Frederick Law Olmsted's and Calvert Vaux's masterpiece is Elizabeth Browning Barlow, who is the director of the private Central Park Conservancy as well as the Central Park administrator for the city's Parks and Recreation Department.

The conservancy is a new concept that may save the old American idea of historic and natural conservation from the budget-cutting zeal of the new conservatives.

The idea is that a group of concerned citizens, raising private donations along with public conscience -- the conservancy -- works closely with and under city government to plan, finance and implement the necessary restoration work and even more necessary administrative reforms.

Barlow's salary is paid by the conservancy, but she was appointed to her newly created job by Mayor Edward Koch in January 1979. Her boss is city parks commissioner Gordon J. Davis.

Barlow studied art history at Wellesley and city planning at Yale and has written extensively on Olmsted, urban design and Central Park. She has also long worried publicly about a city and civilization that allows its finest urban park to be trampled to death.

Now she cheerfully faces the challenge of making Central Park beautiful, agreeable and safe again. "It will take a detailed master plan, new management policies, 10 years of dogged, detailed, devoted work and about $100 million of the same kind of philantropic support that created and sustains the Metropolitan Museum of Art and the Lincoln Center," she said.

Central Park, in Gordon Davis' words, is not only "one of the truly great urban spaces in the world but also reflects a truly extraordinary act of political stamina."

The very creation of this 843-acre "greensward" in 1857 -- wresting some 240 blocks of potentially money-making buildings from Manhattan's relentles grid -- was no mean political feat. Tammany Hall and the developers fumed at tis "people's park," which, they said, "would become a den of thieves and ruffians" and a "perpetual edict of desolation."

The park has suffered a lot in its 124 years. But it suffered most not from desolation but from overpopulation. Olmsted and Vaux designed it in the picturesque gardening style that arranged nature to the taste of 18th-century English nobility. But right from the start the WASP middle class and the immigrants flocked to it with equal enthusiasm.

In the past decade, 13 million people a year have used the park -- cycling, jogging, folk dancing, kite flying, ball playing, bird watching, demonstrating, pot smoking, dozing, listening to music, horseback riding, watching baby or watching girls, making whoopie or making love.

Not a few also enjoy it as Olmsted intended -- as "relief from the cramped, confused and controlling circumstances of the town."

"In its early days, under Tammany nepotism, sloth and inefficiency, the park was nearly as derelict and mismanaged as it is today under an incompetent bureaucracy and a nonproductive union," Barlow wrote recently.

The first city parks commissioner, the autocratic and ambitious Robert Moses, was appointed in 1934.

Working day and night through the unusually bitter Depression winter of 1934, Moses' men repainted, rebuilt, resurfaced, reseeded, reshaped, repaved or re-installed every building, tennis court, walkway, playground, drinking fountain, golf course, bench, fence, playground and wastebasket in sight. He widened and built motor roads and parking lots in Central Park, bulldozing the gentle English landscape into 20th-century modernity.

Central Park as we see it today, said Barlow, is as much or more the product of Robert Moses' imagination as it is Olmsted's and Vaux's original intention. Quite aside from making the park "efficient" for automobility, Moses attempted to make it "popular" with a kind of Disney cuteness.

Moses preferred a barnyard-zoo to real sheep grazing on the Sheep Meadow. He encouraged philanthropists to adorn the park and immortalize their names until, as John Canaday put it, it resembled a "bronze nursery garden version of Madame Tussaud's."

The city around the park changed in different ways. In the decade between 1950 and 1960, a million white middle-class residents left for the suburbs. So did manufacturing industries. The old residents were replaced by immigrants from the South and Puerto Rico, who looked for jobs no longer there and were forced to join the growing welfare army.

Central Park came to be considered a dangerous place, although its crime rate remained relatively low compared with other police precincts.

Mayor John Lindsay's appointment of videogenic Thomas Hoving as parks commissioner revived attendance. It was the era of happenings, wrote Barlow, and Hoving turned Central Park into a giant stage set for such improvised spectacles as war protest marches, gay liberation rallies, lunar eclipse watches, New Year's Eve parties and barefoot weddings with self-styled vows. w

Hoving believes that this perpetual circus helped to relieve tension in the rest of the city. Barlow doubts that a landscape trampled to the beat of acid rock and the scent of marijuana kept New York from burning.

At any event, a park designed for nannies and late-afternoon carriage parades and redesigned for the picnicking families of garment workers did not work well for flower children and hippies. Neither, said Barlow, did rock concerts or the crowds that gathered to hear Barbra Streisand.

Nor would it work for Christo's idea of stringing 11,000 to 15,000 saffron-colored plastic shower curtains along 25 miles of Central Park walkways, as the artist of the "running fence" across California has recently proposed.

Christo's $5 million "gates" were to flap in the wind for only a few weeks and were to be financed from the sale of his drawings.

Many people, including Barlow and parks commissioner Davis are intrigued by this "environmental art" stunt. "The multitude of banner-hung gates appeals to us in almost the same way as the bicentennial convocation of tall ships -- a festive, celebratory, not-to-be-forgotten event," Davis said in rejecting Christo's proposal.

But the days of happenings, however magical and transitory, are over -- at least in Central Park. Christo's proposal was politely denied.

"Central Park was not designed as a fairground for huge congregations," said Barlow. "It was designed to meet perennial need of urban people to make contact with nature and with each other. The park should offer opportunities for impromptu recreation and social experiences. But it should not cater to mass events, even distinguished cultural ones such as Christo banners, Metropolitan Opera performances or Philharmonic concerts."

Barlow believes that New York City needs an open-air festival center and should build one.

Her aim, and that of the conservancy, for Central Park is to invite citizen participation in the park's physical restoration as well as in finding a new defintion of its proper use for sports, play, rest and culture.

"We are not just rebuilding a foundation here, a cast-iron bridge there and elsewhere a meadow. Our 10-year plan calls for what historic building preservationists call 'adaptive reuse,' lively use in the decades to come."

Corporations and individual donors are responding. The restoration of the Bethesda and Cherry Hill fountains was financed partly by a Japanese businessman, Ryochi Sasakawa.

The rangers on horseback prance about courtesy of the Chase Manhattan Bank and the W. Alton Jones Foundation.

Architect I. M. Pei's East Building of the National Gallery of Art and Hartman-Cox's National Permanent Building in Georgetown are among the 15 winners of this year's Honor Awards for design excellence of the American Institute of Architects. The 308 entries, observed AIA jury Chairman Hugh Stubbins, illustrate a diversity of styles "with no seeming coalescence of philosophical agreement."