The former manager of Blair House, the guest quarters for visiting heads of state, says the place is an embarrassment, a "beautiful lady with a dirty face." A government report five years ago labeled the redecoration of two rooms as "tasteless, inappropriate and of inferior quality." And now the problem belongs to the Reagan administration, which just received an architectural report on Blair House that recommends, at the very least, immediate improvements to keep the landmark from deteriorating further.

"The roof leaks, there's water damage in the upstairs bedrooms, cracks in all the walls and the whole thing needs painting," says Carol Benefield, who was manager of Blair House during the last part of Jimmy Carter's administration. "It has not been redecorated since I don't know when. The rugs are worn out, the drapes are old, the heating and air conditioning are old, the boilers are about 20 years old and the furniture and upholstery need to be redone. It's a disgrace.

"Everybody gives lip service to how terrible the condition is, how badly it needs redecorating, but no one does anything about it," says Benefield, who says she apologized for "certain deficiencies" when she first escorted Nancy Reagan through the three-building guest complex. The Reagans stayed at Blair House before moving into the White House last year.

Blair House is the responsibility of the Office of Protocol at the State Department, which three months ago hired the Georgetown architectural firm of Cooper Lecky Partnership to survey the landmark's problems. The study was completed last month. John Murtha, assistant chief of protocol, says he'd rather not say the amount of money estimated to put Blair House in mint condition, but puts the figure at more than $1 million.

Is it likely that Nancy Reagan, whose redecoration of the White House earned national attention, might want to help raise funds for Blair House's renovation?

"The building belongs to the State Department," says Murtha, "and we don't believe there's any necessity for White House involvement. It's not their problem."

Murtha says State Department, Office of Management and Budget and congressional budget experts are discussing where to find the money to proceed. If all goes well, Murtha says renovation might begin next January, at which time Blair House will be closed and official guests quartered elsewhere while the beautiful lady gets a facelift.