Fish danced. Land sharks circled. Mermaids wanted only to twist and shout.

Fins made of wood, fins made of hair and fins made of styrofoam swam through the school of sea life. It was a hot and sweaty Saturday night at the Yale Steam Laundry on New York Avenue. A thin blond woman with green day-glo high heels cruised by in a green day-glo bathing suit.

"Hey look! It's a jellyfish," said a hammerhead shark named A.fs,1 J. Strasser. He wore a tuxedo and a big gray hammer for a hat. "We're looking for a bed of seaweed. It's around here somewhere."

Instead, the Statue of Liberty (it was supposed to be a fish party, but . . . ) strolled by, drink in hand, followed not long after by a foam rubber starfish.

And what would you expect for a "10th-anniversary" (but actually 11th-anniversary) party put on by the Washington Project for the Arts? Nothing less than something called "Ultramarine: A Phantasmic Undersea Carnival in Day-Glo."

Here's what one casual fish was heard saying: "It's really weird. My mother lives in Fairfax and I saw the ad in the paper that said 'Ultramarine.' The weird thing is that's the name of an acrylic I'm working with right now -- the color is called ultramarine."

"This is all very visual," commented another fish head.

About 600 artists, WPA supporters and "people off the street" paid $10 each to be seen under black lights, to down Bavarian beer from the cash bar and to bob to the bands by the time 3 a.m., quitting time for the gala, rolled around. The party, according to WPA Director Jock Reynolds, had nothing to do with the WPA's negotiations over its space on Seventh Street NW. It now looks as though a settlement with developers that would allow it to remain is imminent. The money from the party will go to support WPA programs, Reynolds said.

"This is just a complete blowout 10-year party for WPA," he said, dressed in a sailor suit. "A kind of human raw bar . . .

"Everyone is here, from artists to Washington council members."

Indeed, D.C. City Council Chairman Dave Clarke, decked out as a French sailor, was there.

"I'm here to show my support for the arts," he said. And maybe to do some campaigning to gear up for this fall, when he seeks reelection to his post. "I'm always campaigning," Clarke clarified, "but I'm not here tonight to ask people for their votes; I'm here to enjoy myself."

The jellyfish the hammerhead referred to earlier floated gracefully by, her tentacles waving rhythmically up and down as if resting on top of the ocean, moving with each swell. Joyce Zipperer, an artist at the Torpedo Factory, made herself into that jellyfish in two days.

"I found this umbrella in a ditch," she said. " . . . For some reason I thought I could be a jellyfish." Thus the lilt, as the umbrella was pushed open and pulled closed. The costume cost "exactly $40" to make, she said. She won exactly $50 worth of free fish from the Maine Avenue markets for having the best costume, judged by applause.

Two sea creatures with eyes at the ends of their arms danced a slow, modern ballet, eyeballing the crowd that gathered around them.

"It's ART!" yelled one shark in the audience. "My God, it's art!"

Dean Smith stood in that crowd watching the performance. No ocean get-up for Smith; he had on a navy blazer.

"I'm not a dresser-upper," he said, but pointed out that he sported a fish pin. He's a member of WPA, he explained, not an artist. "I'm a collector, an art enthusiast."

There were even fish stories being cast.

"Nice hook," said a beachcomber to a glittery man with a big foam hook slung over his shoulder. "Whaddya hope to catch?"

"A big one," replied Glitter Man. "You should have seen the one that got away . . . "

Sal Fiorito was introduced as being in charge of "everything from art to . . . " Fiorito immediately fell to the floor in a feigned faint.

"Do you know how many artists it took to do this?" he asked, once he had revived himself. "At least a dozen performers and 50 to 60 artists and painters and sculptors." It took 4 1/2 months just to get the sculptures together, he said.

Near one of the many chicken wire sea scenes Fiorito talked about was a popular booth that said "PHOTO POSTCARDS MADE HERE $1.50." Behind the black curtain, fin folk (or anybody else with the right amount of cash) could stand in front of a sign painted with lobsters bearing human faces. It read "Greetings From Ultramarine 1986."

At the opposite end of the giant, dark, cavernous room that revolved around a sock dryer turned sea urchin in day-glo orange, a sign near the main stage said, LIKE MAN . . . IT'S ULTRAMARINE. It was there that the deejay spun records and bands jammed under a papier-ma che' pale purple porpoise.

One song made the fish people very happy:

I'd like to be

Under the sea

In an octopus' garden in the shade

Jellyfish jitterbugged.