GRUNDY, VA. -- When you've been down as long as the folks here in Buchanan County, where as much as one-third of the labor force is out of work, a promise of jobs, especially a promise made by a politician, is taken lightly.

Thus many folks here have adopted a wait-and-see attitude about the announcement Tuesday by Gov. Gerald L. Baliles that a prison, employing 350 people, will be built here in the next three years.

"You see that road out there?" asked Kenneth Klevinger, 59, pointing to Rte. 460, a four-lane, divided highway that shrinks to two lanes as it approaches Grundy. "Well, they were surveying that when I was a little boy, and everybody said they were going to widen it. Well, they haven't. They were just surveying. Still are."

Klevinger, a retired coal miner, and his buddies who were having breakfast at Druther's, at the foot of Keen Mountain, aren't exactly from Missouri, but they have adopted a "show me" attitude toward the latest promise to help the area.

This despite the fact that community leaders and politicians worked hard to land a prison in this, the state's Southwest corner. Grundy is closer to St. Louis than it is to Washington, and it is far from Virginia's population centers.

"I'll bet not one job out of it goes to Buchanan County," predicted Dave Coleman, 49, who returned here in the mid-1970s after a career in the Air Force and said he has been without work since.

Corrections department officials say, however, that all but 20 to 50 of the 350 jobs will go to local residents, many as guards, who are paid between $14,655 and $21,889 a year.

Although official statistics place the unemployment rate in Buchanan County at 20 percent, where it has lingered for five years, a survey by the school system found the actual rate about twice that high, according to banker Eugene S. Hearl, a leader in the effort to land a prison.

Hard times have so eroded the tax base that the county School Board is considering cutting teachers' salaries at a time when the state has mandated an across-the-board 10 percent increase.

Ground could be broken as early as next spring on the 500-bed medium security institution, which could cost $35 million to build. It is predicted to generate an annual payroll of $7 million when it opens in 1990.

The prison will be built on the site of a shattered dream, a mountaintop community planned by the Island Creek Coal Co. during the coal boom of the early 1970s. The 1,223-acre devlopment, to be known as Buchanshire, was planned for 6,000 people, which would have made it the largest town in the county.

But the dream burst, along with the coal boom, in the early 1980s. All of Buchanshire that can be seen from a helicopter is a paved state highway, paid for by Island Creek, that ends at the property line, and serpentine dirt and gravel roads that follow the hillsides to abandoned mine sites.

Ralph Nielson, a spokesman for Island Creek, a subsidiary of the Occidental Petroleum Co., which has headquarters in Lexington, Ky., said final details, including the sale price, have not been worked out for the 100 acres the state plans to use.

"We hope some of the adjoining land will be used for houses for corrections employes," Nielson said.

There is little outright opposition to a prison, although Bill Anderson, 28, a hospital lab technician, is "a little afraid of the kind of people it might bring in."

Younger folks are more optimistic.

"Prison guard?" pondered Randy Stiltner, 16, who will be a senior next fall at Grundy High School. "Maybe. Better than being inside," he laughed.

"They'll need teachers, won't they?" asked Joe Branham, 18, who said his father, a school principal, "has a waiting list of teachers who can't find jobs."

James Hackney, 25, who said he is temporarily disabled after working seven years in the mines, said his younger brothers may want jobs at the prison: Brian, 23, is trying to get on with the Virginia State Police, and Thomas, 20, is studying law enforcement at Southwest Virginia Community College.

Randall S. Jackson is unqualifiedly pleased about the prison. Jackson, chief deputy of the Buchanan County Sheriff's Department, said a prison here may reduce the number of 16-hour round trips he and other deputies now must make to deliver state prisoners to the nearest processing centers in Southampton near Norfolk, and Powhatan near Richmond.

During the two years it will take to build the facility, Jackson said, "our kids won't have to go to Northern Virginia to look for a construction job.

Despite its problems, Grundy remains a bustling community, with reminders of its boom-or-bust economy everywhere. Some stores, including gas stations, no longer accept credit cards; families sell their belongings from the hoods of trucks.

But the streets are clogged with traffic, including a mud splattered-blue Rolls Royce, and enough privately owned helicopters clatter overhead that local residents don't bother to look up at them.

Buchanan County's delegate to the Virginia General Assembly, Democrat Donald A. McGlothlin Sr., said, "As soon as I knew the state was going to build a prison, I said, 'let's put it in Southwest Virginia.' "

McGlothlin, a lawyer, twirled his handlebar mustaches and recalled that initially people said, "Can't we get something besides a prison?" "But I told them, 'I don't even know if we can get the prison.' "

As for Klevenger's skepticism about Rte. 460, backed-up traffic was funneled into one lane this week by a crew -- sure enough, surveying.

Bill Brown of the Virginia Transportation Department's office of program and scheduling said, "the rewidening is tentatively scheduled for completion in the mid-1990s."