The Marx Brothers Meet Nijinsky," someone suggested for a title. And indeed, it promised to be one of the most bizarre presentations of the decade--a kitchen-sink collection of rock 'n' roll cum ballet, a dance line of policemen and 800 screaming schoolchildren running loose.

The production, the annual fund-raising gala of the National Dance Institute held tonight at Madison Square Garden's Felt Forum, was put together by Jacques d'Amboise, principal dancer with the New York City Ballet.

In a pre-performance interview, d'Amboise said the event lost about $20,000. It failed to sell out.

"We need money desperately," said d'Amboise.

New York City Mayor Edward Koch, announced earlier as a star performer--he had appeared at last year's NDI fund-raiser--failed to show up. A production number written especially for him was presented with actor Kevin Kline reading the mayor's lines.

There were 14 production numbers, and 12 of those starred about 800 children ages 8 to 13. All 800 appeared on stage at the finale.

Nine New York City police officers who have studied dance with d'Amboise almost stole the show in a skit especially prepared for them.

D'Amboise himself danced in one number. A pas de deux excerpted from a ballet he has created for the New York City Ballet's upcoming Stravinsky festival was given its world premiere this evening, called "Pastorale." It featured d'Amboise's son Christopher and New York City Ballet wonder child Darci Kistler. It was bland, mannered and uneventful.

The star attraction of the evening, however, turned out to be 78-year-old George Balanchine, the grand old man of ballet, in the role of composer-lyricist, with a love ballad written to tango music. It was performed by modern dancer Janet Eilber and young d'Amboise, with Eilber in a costume that looked as if it were on loan from a soft-core porno movie.

To the amazement of hordes of parents and perhaps the children themselves, the production--although missing several of its promised stars, such as Koch and actress Colleen Dewhurst--turned out to be elegant entertainment.

D'Amboise tossed kids, cops, Balanchine's haunting lyrics on lost love, barn dancing, jazz dancing, square dancing, disco dancing, ethnic dancing, folk dancing and ballet dancing together in a down-home, folksy fury of vitality.; Peter Gennaro and Chita Rivera were said to have been rehearsing their dances on a cross-country airplane flight. That flight might have been bumpy because the two of them appeared to lack coordination and Gennaro dropped Rivera (she landed on her feet, however) during a lift.

Nancy Reagan, honorary chairman of the event, sent her regrets.

Balanchine, who was the guest of honor at Sunday's run-through performance and who appeared again tonight, explained that he first ventured into songwriting when he observed some of his ballerinas patronizing a bar only "because they liked the waiters--pretty Greek boys . . . so, I wrote a song about it."

Balanchine said his latest songwriting "is not poetry. It's just something extra that I do."

In his song for tonight's performance, the lines included: It was an early spring of life, we passed each other. We went our separate ways . . . One second you were gone. I went my way alone . . . . . . Now spring is gone . . . The years went by, we always tried to find each other . . .

Balanchine said the lyrics, sung by Judy Collins, did not refer to any specific woman and were not an analogy relating to his work or his life.

His work, he said, indicated that "things have come full circle"--the choreographer who created more than 100 ballets to the music of others has now provided the music for a ballet by another choreographer. Observing this, Balanchine said, "That's life."

Sound levels from the amplification system at the Felt Forum--a 5,000-seat boxing arena--had yet to be fine-tuned last night. Balanchine, sitting up front, immediately stuck his fingers in his ears. He kept them there for several minutes until someone supplied him with wads of cotton.