Like a referee in a boxing ring, Bill Strausser had a few preliminary words of advice and encouragement for the contestants: "Nobody cut yourself. Skin good and may the best man win. On your mark - ready - get set - SKIN!"

It was the signal the constestants has been waiting for in the 32d annual national muskrat skinning contest last night. Sixteen skinners, ranging in age from 10 to 74, were on hand to compete in junior, women's and men's categories for the honor and the glory of a unique national title.

By night's end 36 muskrats had been skinned and there were three new national champions.

Once, it is said, muskrat trapping exceeded oystering and crabbing as a livelihood here. Now, in a normal season, it supplements what watermen and farmers can otherwise make. Eastern Shore pelts are being up to $6.50 now, a figure higher than normal because of weather-related scarcity. The meat, which is sold as "marsh rabbit," brings an additional 60 or 65 cents more.

"We can't get no decent rats to skin now," complained senior skinner William Parks Abbott, 74, who has 18 children, "18 or 20 grandchildren and uncounted great-grandchildren. The reason, he and other skinners on the marshy Eastern Shore agreed, is the frigid winter of 1977.

Because of the frozen marshes, Abbott said the muskrats are starved for food, and their hide gets "tight to the meat and is slow to loosen up when you pull it."

The ice has also made trapping difficult. Philip Jackson, 29, a Cambridge farmer who rents 450 acres of marsh for trapping, said he has been able to catch only 300 muskrats this winter compared to 2,531 last year.

The muskrat skinning contest, however, was all fun. It was the climactic event in a three-day Cambridge Jaycees Outdoor Show held mostly indoors at the new Cambridge-South Dorchester High School.

The contestants followed a protocol that included inspecting each others' dead muskrats beforehand to look for illegal precontest knife cuts, of which none were found. They were bound by rules that no more than two inches of fur be left on the animal, that the hide contain at least one eye and that the pelt be "stretchable and saleable." As Bill Doege, the contest judge, put it, in muskrat skinning, "speed isn't everything."

As it turned out, however, the fastest were also the winners in a contest where Eastern Shore skinners predominated, but one family from the bayous of Louisiana (the other major muskrat state) walked off with most of the honors.

Robert Mudd, of Cameron, La., skinned five muskrats in 66 seconds - 14 seconds under the record - to become the new national champion. His wife, Olga, skinned one in 18 seconds to capture the women's title.

The Mudd's 10-year-old son, Lance, the reigning Louisiana Junior Champion, finished only third, however, in a field of eight contestants aged 10 to 16 years old. The winner in the junior category was Wylie Abbott, Jr., a local boy who skinned a rat in 16.5 seconds.

Abott was carrying on the family tradition. Although he was the only member of the clan to win this year, five Abbotts competed in the muskrat skinning, including William Abbott.

William Abbott, from Toddville, has been competing since the first championships in 1936. This year, admittedly not as fast as he used to be, he was given a three-rat handicap.

The Saturday night skinning finals outdrew the Friday evening appearance of country singing star Johnny Paycheck, according to show officials.