In a cramped office on the edge of Old Town, much about Alexandria is explained.

Telephones ring with tidbits about officials and residents in what is perhaps Washington's most self-absorbed, incestuous community outside of Capitol Hill. On the wall is a photograph of Alexandria Police Chief Charles T. Strobel walking out of federal court after his indictment last month. Cluttering the carpet is a newspaper article berating Mayor James P. Moran Jr. for looking "dour" and another lamenting the move of residents Bob and Bonnie Keiger to Macon, Ga.

It is here, in the office of the Alexandria Port Packet, that the gossipy, small-town side of the city is seen in black and white. And bound in the volumes recording much of the paper's 11-year history is a sense of how City Hall politics and the city itself have changed in the past decade.

"It may be the only place such a paper could exist," said James W. Coldsmith, former Packet editor and now publisher of the older Alexandria Gazette, a daily.

Coldsmith, who ran the weekly tabloid for eight years, said the Packet's mission has always been to treat events occurring outside Alexandria's 16 square miles as foreign news. Washington, a Packet advertising brochure says, is "a large, sometimes very embarrassing, suburb of Alexandria."

The newspaper dwells on controversial local issues and personalities. Replacing its widely read and dreaded gossip column E.N.T. (Ear, Nose and Throat), which was abandoned last year, is an opinion page where rumors germinate and flip comments abound. Moran, a bachelor sometimes called "Jimbo," has frequently been chronicled as being on the arm of "a beautiful date."

Even more than feeding the appetite for gossip of the city's 108,000 residents -- many of whom would never say they live "outside Washington" but rather "in Alexandria" -- some officials say the paper has become so wrapped up in local news that it not only records it, but also makes it.

"I would not want to run one Packet in another community," said Davis Lee Kennedy, the Packet's former general manager, who now publishes the Montgomery County Gazette newspapers. Residents of most Washington suburbs, Kennedy said, are drawn to the District and are more interested in the private lives and gossip of Washingtonians than they are in home town politicos.

Not in Alexandria.

Long before Strobel -- who appears in the Packet as often as President Reagan is mentioned in most papers -- was indicted on charges of perjury and obstruction of justice, he became a news item just by becoming a father and being observed changing his newborn daughter's diaper.

"It's full of fun," said William Rowan III, the owner of the Gilpin House book and gift shop in Old Town. "It's got hard news and the gossip, too."

Unquestionably, the story that stirred up the city more than any other was a December 1984 article by Packet reporter Alicia Mundy in which allegations were raised that Strobel had improperly halted a 1984 investigation into cocaine sales at a restaurant frequented by Alexandria Sheriff Michael E. Norris. Subsequent articles alleged that Norris was suspected of drug involvement.

Although the charge, which Norris denied, was never made in court, many politicians said it contributed to his defeat in the November 1985 elections and may have spurred the federal investigation that led to Strobel's indictment.

Packet editors say they stand behind their stories despite the protests they have encountered over them. The Packet, said Editor Patricia Durkin, "reports the facts . . . and does not dwell on rumors. When the paper goes to press, we believe everything in it. But like everyone, we sometimes make mistakes, and if we do, we correct them."

Mundy said her stories produced many complaints. "People call and ask: 'Why don't you leave Charlie Strobel alone' . . . or if I'll write about two-headed babies next," Mundy said recently.

Mundy maintains she was slandered by people who complained about the paper last year after a special grand jury year cleared Strobel of any impropriety and then blasted the press for raising "baseless" allegations against city officials.

Since a federal grand jury indicted the police chief in February on 12 counts of lying to the grand jury and obstructing justice, Mundy -- who won a 1985 Virginia Press Association first-place award for her opinion column, Mundy's Mutterings -- says she feels vindicated. Others, however, do not view it that way.

"If anything they should have been humiliated, not vindicated," said Moran. The mayor said that neither the state nor federal grand juries could find indictable evidence against Strobel on any of the allegations raised by the Packet, such as the halting of the 1984 cocaine investigation.

Rather, Moran said, Strobel was indicted only because the federal jurors believed that he lied when he said he had forgotten events that happened in the 1970s. Much of the furor over Strobel would never have arisen, the mayor said, if it were not for the "cops-and-robbers neurosis" and the "personal involvement" of some of the Packet staff members in the news.

"They take cheap shots for the sake of being aggressive, confrontational," said William C. Montague, the Alexandria Gazette's city editor. "They're eager to make a stir."

The Packet is "a little loose with the facts . . . a little too quick to press," said Alexandria attorney William B. Cummings, who successfully sued it for libel. Cummings represented a couple who were awarded $50,000 last year because of a 1980 story that incorrectly said that the accidental death of their 9-month-old son was included in a child abuse investigation.

But many residents say the Packet is exactly what Alexandria needs.

"One of the reasons I chose to live here was for the ambiance of a small town," said retired rear admiral Kleber S. Masterson Jr., president of the Old Town Civic Association. "Here you know everybody in the city government, the City Council, and the newspaper supports that sense of community."

And former City Council member Donald C. Casey, who some say was defeated last May because he was so closely identified with the newspaper and had joined in criticizing Strobel, said the Packet offers "in-depth reporting that the other newspapers don't have."

Casey was criticized by city officials in December 1984 after he brought unpublished Packet galley proofs of one of Mundy's stories about Strobel into the council chambers and demanded a city investigation into the matter. They said they would have preferred that the facts be gathered by city investigators, grand juries or prosecutors rather than the Packet, which had alleged that Norris was a target of the drug investigation.

Founded and edited by a group of Republicans in the 1970s, the Packet was the the sole minority party voice in a city where elected Republicans seemed as rare as pregnant pandas in the National Zoo. Many said it had no tolerance for the city Democrats' old-boy network.

"If you had to put a label on it, I guess you'd say it is Republican," said Packet publisher John W. Hanes Jr., who was an assistant secretary of state for security and consular affairs in the Eisenhower administration.

"It was very partisan," said Casey, a Democrat. "It slanted the news to cover Republicans and the only coverage of Democrats was to mispresent them."

As the Republicans have gained influence on council in recent years, winning three of the seven seats last May, the paper appears to have shifted toward the new underdogs.

Now, Moran says, it supports the man he defeated for mayor, Charles E. Beatley, a Packet columnist.

Durkin, who replaced Coldsmith as editor, said the paper is nonpartisan, and she noted that it has endorsed candidates of both parties. Durkin -- who, as the ex-wife of former Democratic senator John A. Durkin of New Hampshire, is no newcomer to political circles -- supervises a small staff that includes three full-time reporters.

The paper is distributed mostly free (only 5,500 of the 29,000 copies are paid for each week) and was profitable last year because of its advertising revenues, Hanes said.

Hanes himself adds another dimension to the paper and the town it mirrors. People often wonder why the heir to the hosiery and underwear fortune would want to run a small newspaper that concerns itself with Valentine's Day parties for kindergarteners.

Does he mind that his paper is called a scandalmonger? Hanes responds by recalling the answer of his former classmate at Yale, author and columnist William F. Buckley Jr. "When he was editing the Yale newspaper he used to write outrageous things," Hanes said. ". . . I asked him if he does it so that in the morning everybody couldn't wait to get their hands on it to see why they hate him today, and he said, 'Yes.' "

Durkin, who wrote the February editorial discussing the "great deal of speculation about Mayor Moran's long face," said she did so because "I was just plain tired of him pouting around."

Moran said that about 100 people asked him why he was so tired after the Packet ran a picture of him looking worn-out alongside the "dour face" editorial. "That's the annoying thing, people read it," he said.

As she sat behind her desk, Durkin noted with a grin that since the hubbub about Moran's frown, "I've noticed he smiles a lot more."