A 33-year-old Newport News man, imprisoned for nearly 17 months by Cuban authorities for dropping religious literature from a light plane there, is expected to be among the Americans scheduled for release under a pardon arrangement announced Monday by Fidel Castro.

"Praise the Lord!" exclaimed Mary Bailey, wife of imprisoned Melvin Lee Bailey, after hearing the news Monday night. "In my spirit, I have known" he would be freed, she said.

"We're all real thrilled," said Bailey's neighbor, Carolyn Kincaid. "This street is full of good Christians and they've all been praying for him."

Kincaid said neighborhood children have festooned the Bailey house with "Welcome Home" signs. A tree in the front yard is covered, she said, with yellow ribbons.

Bailey, a computer programmer, was arrested May 27, 1979, after he and a California man were forced by a storm to land in the Cuban city of Manzanillo. Though the pair had a permit from Cuba's Civil Air Authority to make a transit flight over the country, they were arrested when authorities found leaflets stuck to the tail of the plane.

The pamplets were written by Richard Wurmbrandt, founder of Voice of the Martyrs-Jesus to the Communist World, a religious organization based in Glendale, Calif.

Thomas White, a member of the organization who flew with Bailey, later acknowledged dropping the literature before the pair lost their bearings. lHe said it "proclaimed that neither Marxism nor capitalism offered the eternal hope that Jesus Christ offers. It did not advocate military, political or economic change."

Last October, however, Cuban officials brought Bailey and White to trial on charges of spreading anti-communist propaganda. They alleged the airborn duo, dubbed "the Bible bombers" by fellow inmates, made two passes over Manzanillo, releasing a shower of 70,000 laminated leaflets. Cuban prosecutors charged that Voice of the Martyrs was involved in "worldwide anticommunist activites."

Bailey and White each were subsequently sentenced to four years in prison for illegally entering the country and 20 years for "crimes against the integrity and stability of the nation."

Bailey, a former Vietnam helicopter pilot, was at the controls of the plane when it was forced down while attempting to fly to Jamaica. He is described by neighbors as a devout Christian who attended the Colony Friends Church in Newport News. Throughout his ordeal, however, his involvement in the affair on behalf of Voice of the Martyrs remained something of a mystery.

Yesterday a goverment source disclosed that Bailey first learned of the organization through a magazine. He wrote to them offering his services as a pilot, the source said, and was then recruited for the ill-fated Cuban flight. p

Bailey and White were imprisoned along with 20 other Americans in the international wing of a facility near Havana. Last fall, State Department officials secured visiting privileges for Bailey and his wife was able to visit him twice there this year.

"I have really felt he was going to come home soon," Mary Bailey said. She said that when she visited him two weeks ago, he told her, "I'm surprised I'm not home already."