An associate recalls that contractor Terry G. Blackstock was in a "more than cheerful mood" Monday as he prepared to show two Arlington town houses to prospective buyers that sweltering afternoon.

But first Blackstock, the 28-year-old vice president of an Alexandria home remodeling firm, had to take an oddly dressed man to see some real estate in an isolated section of Fairfax County, the friend said.

The two men met in Alexandria and left, supposedly for the wooded Gunston area of Fairfax that lies alongside the Potomac River 17 miles to the south. At 3 p.m., Blackstock called his office and promised to keep his appointment in Arlington.

It was the last time anyone at the firm talked to the young contractor.

In a case that one of his colleagues says has his co workers "spooked and looking over our shoulder," Blackstock's body was discovered 30 minutes after the telephone call, near the driveway of a secluded 65-acre estate on Gunston Road. He had been shot in the head, apparently at close range.

"We don't have a lot to say at this point," said Fairfax County police spokesman Warren Carmichael yesterday. "This one is going to take a lot of long, hard work."

Investigators are studying what Carmichael said were "a number of complex business deals . . . there were quite a few of those" that may be related to the homicide. But, he added: "We're at a loss at determining a motive at this point." Detectives call the case one of the most baffling murders they have encountered in the Virginia suburbs this summer.

Officers say they found $179 in cash and an expensive wrist watch on Blackstock's body, indicating that robbery may not have been the motive.

Blackstock's relatives, colleagues, and business associates have stated in interviews that the victim was heavily in debt in a business that has been racked by inflationary times, soaring prices, and consumer apathy.

"He owed a lot of people money and they didn't think they were going to get it back" said one colleague, who asked not to be named.

What is known about the crime is limited at about 3:10 p.m. Monday, William Tuerke Barrett was washing his car on the Gunston Road estate of his grandparents when he heard a noise. It was "three gunshots . . . not rapid fire, but steady, like somebody was shooting at tin cans," he said.

The estate is roughly one-quarter of a mile from Gunston Road, Barrett said. The area is heavily wooded and gunshots are not uncommon. Barrett said he thought "somebody was hunting rabbits."

Twenty minutes later he was driving along the estate's winding driveway when "I saw the body with blood covering the face near the driveway and the white brick estate entrance." Shaken, he told a caretaker to call the police and then drove down Gunston Road toward Richmond Highway.

"It was really weird. I saw this guy, with sandy hair and faded jeans, not 40 feet from the driveway, walking in the same direction. It was strange because there's really no place to walk to from there," Barrett said.

Barrett said he exchanged "a long hard look" with the man and kept on driving. "He looked like he might want a ride, but I wasn't about to pick anybody up then."

A witness said the man who left the Alexandria Redevelopment office with Blackstock also was "sandy-haired, wearing faded blue jeans and a heavy wool sweater," even though it was a hot and humid afternoon.

Another curious aspect of the case: Neighbors called to the murder scene remarked yesterday that "it was scary" how Blackstock's body was stretched out on his back, with his feet together and his arms at his side "like he was on a stretcher."

James Blackstock, president of the Alexandria Redevelopment Co., called his son "the greatest son a father could have . . . What else can you say about a son who has done everything you wanted him to do?"

Young Blackstock grew up in Takoma Park and Silver Spring, and graduated from Bladensburg High School in 1970, his father said. Since he was 14 he worked in construction.

At the age of 23, he started his own company, the Blackstock Development Corp., which he operated for a time from his Fairfax home on Belmont Boulevard, said the father and associates.

Despite what other builders described as the "excellent quality" of his work the business fell on hard times, and Blackstock fell into debt.

In the latter part of 1978, said colleagues, Blackstock rejoined his father's firm in Alexandria, and the Blackstock Development Co. "was left docile and dormant."

Blackstock had planned to be married next month, a family member said, but the wedding had been postponed until December.

"This just isn't a great business to be in right now," said another business partner. "I made a bad deal once. A guy told me 'Be thankful all you lost was money.'"