WOODLAWN Plantation is bursting at the seams with needlework through next Sunday. More quilts, crewel, embroidery and needlepoint projects were in the annual exhibit thisspring than ever befor in its 19-year history. For the first time, about 40 entries had to be turned away for lack of space.

Embedded in this richness, with more than 1,500 entries from nearly every state in the union and many foreign countries as well, the six judges have literally found gold--a noticeable rise in good quality embroideries using gold and silver threads.

Another needlecraft showing a marked increase in quantity and quality is counted cross-stitch. Ginnie Thompson, one of the Woodlawn judges, makes charted designs and conducts classes at her shop in Pawleys Island, S.C. She is credited with being single-handedly responsible for the renaissance of interest in counted cross-stitch, which is not to be confused with plain cross-stitch. The latter is sewn over a stamped-on pattern using nearly any cloth as a base.

Counted cross-stitch requires a fabric woven in an even grid so the stitches can be counted horizontally and vertically. No stamped pattern is used so the result is likely to be a more versatile and personal style.

Thompson became fascinated with the stitch as a 10-year-old girl when an elderly woman she knew showed her patterns and samples. When that friend died, these were willed to Thompson. But 30 years ago, when Thompson began her search for supplies, no such even-grid fabrics existed; the craft had been lost for generations.

She finally discovered new sources and that fabrics were even invented and manufactured in South Carolina. But the big breakthrough came when Thompson traveled to Copenhagen in 1971 to study at the Danish Handcraft Guild School.

In Denmark, under royal patronage, the art of counted-cross stitch was flourishing. Thompson returned with new ideas, techniques and sources of supplies, and has returned to Denmark every few years since to refresh her techniques. She is the author ofSee WOODLAWN, Page 2, Col. 3 Above: Martha Washington doll doing embroidery, by Muriel Fine. Below: Harpers in needlepoint, by Eric W. Thomas. Photos by Bill Snead--The Washington Post. Applique quilt by Nancy W. Lyons; photos by Bill Snead. Pillow entered for exhibition by Nancy Reagan, designed and stitched in needlepoint by decorator Ted Graber. Pins & Needles - WOODLAWN, From Page 1 "Second Steps in Counted Cross-Stitch" published by the American School of Needlework, and "John James Audubon's Birds in Counted Cross-Stitch," which will be published by Scribner's in May.

According to Margaret Davis, director of programs at Woodlawn, the popularity of needlework categories and styles goes in cycles. "Six years ago crewel was very popular. Ten years ago some of the entries were way-out things--stitches done with chicken feathers or creations mounted on a barn door." Now she sees more traditional, subtle and elegant designs.

Hope Hanley, another Woodlawn judge, is the author of books that are known as bibles to needlepointers. She noticed more pictures this year, a lot less of "the same old kits, more original kits and more original work. There isn't as much repetition; they aren't doing it like popcorn."

The six judges included, besides Thompson and Hanley: Doris Bowman, needlework and lace specialist at the Smithsonian Institution; Margaret Gilman, editor, McCall's Needlework and Craft Magazine; Christine Meadows, curator of Mount Vernon; and Lawrence Kane, executive editor of Family Circle Magazine. They chose as "Best in Show" a set of needlepoint church kneelers designed by amateur Meredith Finch, and beautifully executed by 34 members of the Memorial United Methodist Church, Thomasville, N.C. The kneelers also won the Best By Women ribbon.

"Most Original in Show" ribbon was awarded to Barbara Meger of Crofton, Md., for a small diorama done in needlepoint showing a farmhouse with an open door on the background and a standing windmill and garden vegetables and flowers in the most inventive imaginable raised stitches and bits of cloth in the foreground.

"Best by a Man" was won by Bruce Laval of Washington for a cross-stitch based on a book cover design, "The Decorative Designs of Frank Lloyd Wright" by David Hanks.

No ribbons can be awarded to professionals, but sure to be noticed is the pillow entered for exhibition by Nancy Reagan, designed and stitched in needlepoint by decorator Ted Graber. The design includes the intitials "R.R." and at top and bottom the dates "1911" and "1981"--and at each side, the figure "70." It is done in shades of tomato red and light beige. Among other well-known exhibitors are Barbara Bush, Mary Ripley, Julie Nixon Eisenhower, Eleanor McGovern and Linda Bird Robb.

The judges had an especially difficult time making choices in the quilt categories--the quality is so high. Madge Murphy of Manassas, Va., worked a very fine one representing the 50 states with appliqued emblems and lusciously embroidered state birds and flowers.

In the counted cross-stitch category, a delicate, elegant design of fanciful birds and a birdhouse was done by Terry Beth Sher of Springfield, Va.; Barbara Walker of Falls Church did a bolder butterfly design; and Carol Ingrando of Beckley, W. Va., did an old-fashioned choo-choo train in bright colors, which won a first-place ribbon.

A folding screen with an elaborate frame, needlepoint centers with motifs of flowers and hovering butterflies, and glass insets at the top, stitched by Mary Powers of Alexandria, is certain to be one of the most admired entries.

During the exhibit, which runs through March 28, visitors are invited to vote on the "Most Popular in Show." The results will be announced at the end. Their choices have not always agreed with those of the judges. Some years the most popular entry has won no ribbons.

The 19th Annual Needlework Exhibit at Woodlawn Plantation is open through March 28. Admission is $3.50 for adults, $1.75 for children 16 and under. Free parking. Hours: 9:30 to 4:30 daily.