Over the oysters at Dominique's, the crab cakes at Duke Zeibert's, the lobster at Maison Blanche, the veal at Jean Louis, the prime steak at Gary's -- hosts and guests, maitre d's and chefs mourned the possible passing of the totally tax deductible business lunch. The end of the world as we now know it.

They fried the Reagan administration's proposal to limit business meal tax deductions to $25 a person plus half of anything over that.

"I don't know where you could get a caviar sandwich for that," said divorce lawyer Mark Sandground, a partner of La Nicoise restaurant, who said he had never had lunch for much less than the Reagan limit. "All the Frenchmen will have to go back to France. The rest of us will have to move to St. Louis. And serve a lot more ice tea."

"I've taken and been taken," talk show host Larry King said yesterday, settling down from his table hopping at Duke Zeibert's, where he is as familiar as the pickles and rolls on the tables. "But it's all coming to an end."

At last in Washington, the specter of bread and water is rising to face many who dined on croissants and rare vintages.

"Boy, will that hurt in this neighborhood," said Sheila Tate, Nancy Reagan's former press secretary and now senior vice president with Burson-Marsteller. "I took a reporter to the Tiberio the other day. It was $60 for two, and only spritzers, not three martinis. For $20, $30, you could have salad and water. I'll bet the business entertaining legislation will never see the light of day. They just put it in so they'd have something they could take out."

A few optimists saw it as a chance to trim not only expenses, but the diners.

"We're just going to try to pick clients who are among Dr. Pritikin's patients," said Frank Mankiewicz of Gray and Co. "We'll probably urge our clients to eat a big breakfast. Nutritionally, it's very sound."

"Maybe everyone will get thinner," said Muffie Brandon, former White House social secretary, now president of the Washington office of Rogers & Cowan. She added, "I've heard there's a lot of pressure to keep it from going through."

A few self-confident and affluent souls say they won't give up eating, just deducting.

"Those of us who make our own expense account will continue to eat where we eat," said Washington Inc. partner Gretchen Poston, who says she usually has two expense account lunches (soup at noon and an entree at 1:30) a day, often under Germaine's skylight and hanging plants.

Many spared a thought for not only the chef, but the busboy in a tax deductible-less hereafter.

Dwight Porter, a Westinghouse representative, was eating lunch in the quieter backroom booths at Dominique's with Timothy O'Shea, also of Westinghouse, and lawyer Stuart Dye of Graham and Jones. Said Porter:

"It'll destroy the delicate ecological balance. It's killing the goose that laid the golden egg."

At another lunch spot, Duke's, a party with Patrick Ewing as its tall center started late. David Morgan, an Adidas representative, picked up the tab for the lunch honoring the basketball star (shrimp cocktail and orange juice for starters for Ewing). Said Morgan: "Sounds unrealistic to me. The cost per square foot is expensive. You couldn't rent a room to do business for the cost of a meeting lunch in a restaurant."

David Falk, a Ewing attorney, added, "From my semester of income tax at law school, I think the code is in need of reform. Some reform is necessary. But this regulation could have the potential for harming a sluggish economy."

Most people, over their glasses of white wine or Perrier with lime, claimed it's food, not drink, that runs up the tab. The three-martini lunch, as Duke Zeibert put it, "is gone with the high-buttoned shoes."

The Rev. Gilbert Hartke, Catholic University's emeritus theater czar, who always receives a celebrity welcome from Zeibert, said the tax proposal on entertaining "won't hurt me. I don't drink three martinis, but I think it's too big a gun for the purpose."

At a big table in the middle of the room, Edward Howard, Washington representative for a systems firm, entertained a group of Canadians. "We only had two martinis," he said, and estimated lunch for five at $150, without tip, for soft-shell crab, crab cakes and similar dishes.

And New Venture Broadcasting Corp. President Alex Sheftell and plastic surgeon Dr. Clyde Litton stopped on their way out of Duke's to admire the sculpture on the balcony. Sheftell said he'd taken Litton to lunch "because I owe him. We were just talking about the president's speech over lunch. I'd hate to see it enacted.

"Broadcasting does a tremendous business at lunch and dinner, where you can get people away from the phone. And it's exposure. Somebody comes by your table, sees you seated with someone like Larry King, a major star, and they come over to talk to you. Sometimes deals come about that way."

Then there are those who already have learned to pay their own way.

Dick Wheaton and Dave Mandolin, management consultants having lunch at Dominique's, made a joint statement: "We're each paying for our own. It's the only way to go."

MCI Communications spokesman Gary Tobin said if MCI chairman William McCowan "eats out once a week on the company it would be rare . . . We've always traveled coach."

Giant Food stores spokesman David Sykes said, "We have our own cafeteria and 99 percent of our business lunches are eaten there. When our people eat out, they're encouraged to pick up their own checks. We don't pay for anyone's country club membership . . . Zero."

Country club managements haven't yet made statements on Reagan's proposals on the deductibility of club memberships. Philip Jordan, attorney for Burning Tree Country Club, said it would have no comment. Spokesmen for Congressional Country Club and Chevy Chase Country Club could not be reached for comment.

But Chef Jean Louis, of the restaurant of the same name, where a three-course lunch (white and red wine) is $30 and dinner can go to $100, had this to say at the thought of the possible meal limits: "Say that Jean Louis laughed."