That hideous strength which is Australia II lies lightly tethered at the dock, gawked at by an uneasy throng. Behind her, hung from their gallows hoists, her vanquished foreign rivals dangle: Italy's Azzurra, Britain's Victory, France, Canada I. And also the eliminated American yachts, Defender and Courageous.

The long trials, which began in June, are over for them, and the final game is set. The American yacht left afloat is Dennis Conner's Liberty. She and Australia II square off tomorrow, one on one, in a best-of-seven series.

The America's Cup itself, a garish sterling pitcher won by the United States yacht America in 1851 and never lost in 24 contests since, resides on its blue velvet pedestal in the New York Yacht Club in Midtown Manhattan. Should the Cup ever be lost, tradition holds, the vacancy on the pedestal will be filled with the offending skipper's head.

So all eyes here are on Conner, who defeated Australia in 1980 by a score of 4-1 and whose autobiography is titled "No Excuse to Lose." But when Newport looks at Conner now, Newport looks at his neck.

The summer-long record of Australia II was 48 wins and six losses.challenger since the cup moved here in 1957.

There have come upon Newport a pall, a hollowness and a confusion, a sense of things going wrong, a cruel and unintended suggestion of mutability, a corruption of optimism, a slippery, sliding discomfort, a vague malaise, an uneasy, queasy feeling, a worrisome, nagging, headachy awareness that possibly, conceivably, horribly, unaccountably, the Cup, this time, may . . . go away.

To Perth. To western Australia. (And not even to Perth, but to Fremantle, 12 miles away, where the Swan River meets the sea.) To Perth, which is closer to Singapore than to Sydney. To Perth, which wasn't even colonized until 1829, and where Yagan of the Bibbulmun, the last vestige of 1,000 generations of aboriginal tribesmen there, was defeated by these same Aussies now led by Alan Bond--"Bondy"--the land developer and brewery owner come charging to our American shores.

Yagan. When the Aussies got him they cut off his head. They sent it to England as a curiosity, and perhaps as a warning.

Newport hears the chants of the hungry generation Down Under. Sees the posters everywhere of a crazed koala leering over the slogan "We're Coming to Get You." Was this, could it have been, the last America's Cup Ball for Newport?

Helen Winslow was cochairman. Her home here overlooks Bailey's Beach where Cliff Walk ends, in grandest Newport. Her husband, John, has been president of the beach club for 15 years. And he runs the Preservation Society of Newport County, guardian of the grand mansions of the 400.

The ball was an astonishing success this year. Nearly 2,500 guests at the Breakers, built by Cornelius Vanderbilt II. "People said, 'How can you have such a large ball, when you haven't got Prince Andrew?' But we did have a star--the Breakers," Helen Winslow explained. And there was something else Helen Winslow confirmed: "Yes, it's true a lot of people think there will never be an America's Cup Ball here again. This year was a bonanza. I don't think you could get anywhere near that number of people if you didn't have the Cup. We're known as the yachting capital of the world. If the Cup goes away, are we still? The Cup is very stimulating and it brings interesting foreigners. If they take it away, what will they replace it with? Something we're not happy with? Casino gambling? Oh, I hope not."

Later, as the sun was declining, John Winslow emerged from the waves of Bailey's Beach after his thrice-daily swim. Twenty years ago, he had been saying there were just two boats in the America's Cup. This summer there have been nine in all and the sheer size of the effort has thrown a great strain on everyone. At the sandy-floored bar of the old beach club, he noted the pictures of a Newport past--a Newport with fox hunting, polo, coaches and fours.

"All gone now," Winslow said smiling, "but Newport is still here. By the way, what makes you so sure there will be another Cup? The New York Yacht Club could just retire it, you know. It's in their power to do that."

This was the summer the center did not hold in Newport. This was The summer the four foreign challengers spent $35 million, the best-financed invasion ever. The combined American budgets were a third of that--$8 million for the Dennis Conner syndicate, a figure matched both by Alan Bond of Australia and by the English.

This was the summer the New York Yacht Club burgee, symbol of impeccable yachting endeavors, flew over a ricky-tick America's Cup Expo Center here--free admission, 50 exhibitions, see a real 12-meter up close. Newport, a carnival town? Worse still, there was an unmistakeable sense that under pressure the New York Yacht Club behaved badly.

That business of the challenge to the Australian winged keel did not go down well. It looked cheap, it looked nervous. The keel's illegal, the Yacht Club claimed, while all the while the Americans tried to copy it with plywood gizmos laughably attached to their underwater parts. Why, the Aussies even got letters of encouragement from citizens of Rhode Island. Wrote Mary K. O'Toole of Providence, "It seems the Americans are determined to keep the Cup by hook or by crook."

Perth is so very far away. Perth is the most isolated big city in the world. There the people like hang gliders, and on the dry salt lake of Kambalda they race land yachts--60-mile-an-hour sailboats with wheels. Fremantle is a port town the size of Newport, 30,000, its Victorian buildings quaint. The air is dry and the temperature is often 100 degrees and it never rains in summer and the wind blows much harder than in Newport, a steady daily 20 knots, and every man jack has a boat or a surfboard. And, of course, when it is Cup summer in Perth, it will be dead winter in Newport.

"If we win the Cup you won't have to worry about absurd formalities as they have in Newport," said Lesleigh Green of the Australian camp. "You wouldn't have all those receiving lines at parties. We don't believe in receiving lines in Australia."

Newport Mayor Paul Gaines confronted the potential reality months ago. He has thought the unthinkable, imagined the unimaginable, and he has looked at Fremantle on the map.

"Somewhere down the road, we're going to lose it," Gaines said. "Newport needs the Cup because it keeps us in the headlines and it keeps the tourists coming, but a lot of people here are taking the perspective that the Cup won't be here in four years whatever happens."

How's that again, your honor?

"Well, we should have received a letter six months ago, for planning purposes, in which the Yacht Club tells us that Newport is their choice for the next challenge. We haven't received that letter.

"So I wrote to them saying that we definitely want it here, but I haven't gotten a response. Other places want it. Marblehead wants it. San Diego wants it. New London, Connecticut--why, they've offered $1 million if the Cup was held there. We are in no way willing to give up $1 million to keep the Cup here."

Mayor Robert Martin of New London was surprised to hear about the $1 million offer. "We did?" he asked. "I hadn't heard." Then surely it is only talk. More confusion in a confusing summer. More Terror Australis, as it says on the marauding koala bear poster. "No, no, it's a wonderful idea," said Martin. "Whatever you do, don't squelch the rumor."

Gaines says the real problem in Newport is that "the time-sharing condos have come in. The dock facilities are shrinking. Newport is in a race against time, against the condos. The condos are eating the dock space, and if we don't have the dock space we can't handle the Cup."

This week Newport elects a new mayor. Gaines is not running. He's off to be assistant to the president of Bridgewater State College in Massachusetts. But he'll still live here in Newport. As it happens, Gaines is black. His old neighborhood here is called West Broadway.

"I go over there and the people in the projects don't care about sailboats. They say to me, 'Hey, man, the Cup? Let it go.' I mean, the keel controversy is not a big thing to them. They care about not being able to park in front of the supermarket. Why do we even need the Cup is what they ask me. But we do, we do."

Why Newport? Well, the answer for anybody in Newport is to just look out the window. This is as good as American yachting gets. New London? Who's kidding who? This is where the Bermuda race starts. And the Annapolis-to-Newport race ends. And the round-the-world race. And the singlehanded transatlantic race. When the Navy reduced its force in 1973, Newport thought it was a goner, but it wasn't. Sailboats brought it back. It was the tall ships in 1976 that set off the condo boom. It was brash Ted Turner in the Cup of '77 who put it on the publicity map. The beaches are grand and now the town is all Georgetownized in pastel blue, and the pre-Revolutionary homes are being restored and those mansions along Cliff Walk are the real thing.

So why is Newport nervous? Why has it got the jitters? Why do the Ray-Ban sunglasses set have ants in their red yachting pants?

See, 12-meter racing, bub, it's not regular sailboat racing where you get a gang of lads in a fleet of 30 or 40 boats as they go off tacking and jibing and skinning their knuckles and pretending it's world war and if you come in second out of 40--not too shabby. Why, in the Olympics they give you a silver medal for coming in second.

Now, the America's Cup is match racing, just two boats, and the second boat is in last place. It's a power game played by American power rules. Second place is last. Second place wins you a trip to western Australia. Perth. And not even Perth, but Fremantle, 12 miles down the Swan to the home porch of that hideous strength which is Australia II.

"The Australians were fun at first, but then everybody got sick of them." That is Gary Jobson of Annapolis speaking, the tactician of the Defender, which lost out in the final trials to Conners' Liberty. Jobson, who usually enjoys himself by making fun of Conners, has now closed ranks. "It'll be Dennis 4-zip, that's my prediction."

Jobson expects to skipper a 12-meter of his own next time around, but he says he won't be in Newport any more than he has to, even if the America's Cup is.

"The greedy money grubbers are really taking over around here. There's no reason the cup has to be held in Newport anyhow. There's no reason why Mystic, or Marblehead or Stanford or Atlantic City--yes, Atlantic City--couldn't do what Newport does, just as well. The prices here are just sky-high. They want $120,000 for waterfront space for a campaign.

"I'll tell you something: For a year and a half before this cup, I got a phone call a day from people in Newport. With the exception of a few businessmen who wanted to help, every single other call was from somebody who wanted to know what they could get out of the Cup, not what they could put in.

"If the racing does stay here next time, I'll run my operation out of Jamestown or Block Island, or someplace else nearby. Because they're killing the golden goose in Newport, that's why."

They've never had a ticker tape parade in Perth, but they're planning one if the Cup comes down, a great big ol' ticker tape parade on St. George's Terrace--for Roone Arledge to aim his cameras at and record Alan Bond, the conquering financier-hero, borne on the shoulders of his countrymen.

And in Sydney, on the other side of the continent, Rupert Murdoch's News Ltd. organization is planning a full week's celebration just to say thanks.

And in little Fremantle the Victorian hotels will come to life and the factories converted to condos will be letting rooms, and the Italian and Portuguese restaurants will have the crowd that Christie's and the Candy Store have this summer in Newport.

"The Aussies are great knockers," said Lesleigh Green. "We're known for knocking people off their pedestals. Maybe it's an inferiority complex. We don't like it when people succeed. We tend to ridicule them.

"But if the Cup goes home if the Cup goes home? Alan Bond will be the absolute hero of all time. I reckon he'll get knighted. They'll say, 'Good on yer, Alan.' The crew, why the crew will walk into any shop and the shopkeeper will give them the goods right off of the shelves.

"The Aussies love sports heroes," Green explained. "They love them more than their business heroes. And, of course, social heroes don't exist. But the Royal Perth Yacht Club is going to put on a series of cocktail parties stretching over several weeks. They have to because their liquor license only allows 200 people at one time."

In that scenario, so winningly imagined for us by Lesleigh Green, the ladies will be drinking vermouth and ginger and the gentlemen will be drinking Swan lager and Foster beer and white wine, and the dry wind will be blowing and Newport will be only something that needs to happen from time to time in a foreign country named America, where the Cup used to be sailed.

There will be no problem with receiving lines and other formalities because there will probably be no America's Cup Ball at all, per se, as we know it, in western Australia.

Maybe it's only a nightmare, losing the Cup. But whatever happens, this was the summer when Newport had a rude awakening.