"This is an American story. The principal actors are American and all speaking parts will be with American actors." So reported one crew member to Daily Variety of "The Lords of Discipline," a Paramount film soon to begin production. Normally, the nationality of the film wouldn't be an issue, but in this case it's already begun to stir up a fuss. The movie is set in an American military academy, and it concerns a young cadet who finds himself gradually defying the school and his classmates. But in these post-"Taps" days, the film doesn't represent the kind of image our military academies want to have, so Paramount has been unable to find an agreeable location in the United States, despite an offer of an estimated $200,000 for the use of facilities (or an offer of $400,000, according to one report). "We've tried to build our reputation since 1842," said a spokesman for the Citadel, the Charleston, S.C., institution in which Pat Conroy's original novel was set. " . . . This film would tarnish that reputation." So the Citadel, site of Paramount's most concerted efforts, refused to go along with the film company, and even many members of the surrounding community were reportedly reluctant to let the company film near the outside of their homes. When institutions in five other states also declined the location was changed to London, where all but 10 days of exterior shots will be filmed. Two more figures in this story are worth mentioning: the film's director and its technical adviser. The latter is a 65-year-old former assistant commander of cadets at the Citadel, who was also a 1938 graduate of the institution and a prominent character in the original novel; he's able to assist the production without fear because, in the words of the Citadel spokesman, "he's retiring this summer." And the director of this all-American saga is an Englishman: Franc Roddam, best known for "Quadrophenia," the extremely British tale of young mods in that country in the mid-'60s.