"Forbidden Broadway," which starts previews this week at the Shoreham's Marquee Lounge, is one of those shows with humble beginnings that has mushroomed into a virtual McDonald's of musical revues. There are productions running in Philadelphia, Boston and Chicago, as well as the original, which opened in January 1982 in New York, and one planned for London. Toronto, Los Angeles and San Francisco have already seen it.

It all began on New York's Upper West Side in Sella Palsson's restaurant, an establishment she started with two partners eight years ago. Palsson, who came here from Iceland in 1968, is now coproducer of the Washington, Boston and London productions and has virtually given up running the restaurant for her new-found show biz career.

Gerard Alessandrini, who conceived the show and wrote the lyrics, approached Palsson about using the upstairs cabaret room in the restaurant, and after a 20-minute audition she and her partners decided to back a full-scale production -- meaning four union performers and a pianist -- for the 70-seat room. It is still running, Palsson said, even without advertising, thanks to word-of-mouth and returning patrons. Alessandrini periodically updates the show, which is a spoof of Broadway shows and stars.

Finding angels is the least difficult aspect of Palsson's job, she said. Capitalized at $100,000, "Forbidden Broadway" is a mere bagatelle compared to the average $300,000 off-Broadway production or the starting-at-$1-million Broadway show. "I've had to turn investors away," Palsson said.

Yet the New York production does no more than break even because the 70-seat house is so small. "We keep talking about moving it," she said. "But somehow we don't." The Marquee Lounge has 230 seats, and the producers hope for a better return here.

They cast locally, largely because they're planning a long run and have found it's easier to keep a cast that's working where it lives. There are eight performances weekly, and the ticket includes a one-drink minimum on weeknights and two-drink minimum on Saturdays. Call 745-0030. End of 'Story'

"West Side Story," which did land-office business during its run here, closed Saturday. A planned five-city tour has been abandoned, reportedly because the show was undercapitalized and the producers were having trouble keeping the large enterprise afloat. Odds and Ends

Peter Sellars, artistic director of the American National Theater, speaks tonight at 6 at the National Theatre as part of its Monday evening forum program. Admission is free . . . Three types of theater scholarships are available for study at the University of Maryland; the deadline for applying is Oct. 18. Call 454-2541 for information . . . The Kennedy Center is offering a workshop/seminar in both performance and teaching the arts this fall called "Focus on the Arts"; call 254-7190 for information.

Donna McKechnie is returning to her role in "A Chorus Line" for the touring company that opens at the Morris A. Mechanic Theatre in Baltimore next week, and coauthor Nicholas Dante will play Paul San Marco . . . Halo Wines is playing the daughter in Arena Stage's production of " 'Night, Mother," not the mother, as might have been more predictable casting. Longtime Arena associate James Nicola is directing, his first mainstage production, and Studio Theater mainstay Russell Metheny is designing the set . . .

Arena's literary staff is awash in scripts from the Foundation of Dramatists Guild's new plays program, which is funded by a $20,000 grant from CBS. From the 1,257 scripts they've gotten, Arena will produce one play, to be announced in January . . .

A new group is joining the 14th Street theater row. Theatre du Jour opens Friday with "Blindness From Looking Too Hard at the Sun," a performance art piece, in the Jarry performance studio. Call 462-2774. Birthday Bash

Roger Stevens' 75th birthday will be honored Oct. 5 in the Terrace Theater with a benefit featuring Leonard Bernstein, Isaac Stern and songs from some of the flop musicals Stevens has produced during his 30 years in the theater. Remember "Golden Apple"? Or "1600 Pennsylvania Avenue"? Tickets, at $750, benefit the Kennedy Center. Stevens' birthday was actually last March, so no presents please, just money.