ST. MICHAELS, MD. -- Darryl Larrimore hadn't made money oystering in three years, and the skipjack captain wanted to sell his 53-foot boat, one of a dwindling fleet of sail-powered dredging boats to ply the Chesapeake Bay.

Larrimore, 35, went to R.J. (Jim) Holt for help. Holt, 70, is retiring as director of the Chesapeake Bay Maritime Museum, and could offer no encouragement. First, the museum couldn't meet the $55,000 price. Second, it already had a skipjack, along with dozens of other classic or bygone boats of the bay.

Holt promised to let Larrimore know if he came across a buyer. "It's a sad thing to see these things go," he said, wishing Larrimore luck.

The meeting of the retiring museum man and the prematurely retiring skipjack captain underscored an irony of life today in and around the Chesapeake Bay: As its harvests of oysters, rockfish and shad have declined, nostalgia for its disappearing rough-and-tumble way of life has boomed.

Holt's 17-year tenure as head of the bay's largest nostalgia collection has coincided with the Chesapeake's commercial decline and with the transformation of St. Michaels, touted as "a town steeped in maritime tradition," from a shipbuilding, seafood processing and watermen's center into a tourist mecca below the Bay Bridge on Maryland's Eastern Shore.

The museum under Holt's direction has both reflected and spurred the shift. Although the town's permanent population, hovering around 1,300, has changed little over the years, the jobs are now to be found in the trendy restaurants and shops that line the main street, and at the museum.

The museum staff has grown since Holt arrived from three to 26 {35 in summer}, putting it among the town's largest employers. The operating budget has grown from about $50,000 to $650,000 a year. The museum has 4,200 dues-paying members, including 1,000 who pay $50 a year for 10 nights of $10 boat docking privileges along its bulkheads. Members and the museum's 100,000 ticket-buying visitors help to fuel the local economy.

"The museum has had a real economic impact in this community," said Town Manager Bill Nicholson. "Jim Holt's been a force."

From his perch on the peninsula still known as Navy Point, this rather modest man has watched the town change and his museum mushroom with artifacts and exhibit buildings. It now has 17 structures on 18 acres, and more buildings are being added to create a "Watermen's Village." At the same time, as the watermen have left the water, the number of public slips filled by workboats here has dropped, their places taken by leisure sailboats and yachts.

Last week, only half a dozen or so workboats, with oyster tongs at rest, occupied the slips. "As watermen have left town, people who've come here to retire have taken their slips," Nicholson said.

Holt's acquaintance with St. Michaels has spanned both eras. While in high school, he sailed into St. Michaels' harbor in the 1930s.

"There was nothing here but the seafood industry," he recalled. "On a hot day, you could smell it from the mouth of the Miles {River} because they threw all the crab shells {waste} overboard. You could hold your breath and sail into St. Michaels and buy a couple of pounds of crab meat for 25 cents a pound, then go across to Leeds Creek and eat a delectable lunch."

Holt, a Philadelphian, joined the merchant marine at age 15, then finished high school and graduated from the University of Pennsylvania in time for wartime naval service as an officer in the Atlantic and the Pacific. After a stint in occupied Japan, he returned stateside to work for the Honeywell Corp., eventually running the company's Latin American operations.

With five children, Holt and his wife Be bought a summer place on the water near here in 1965, and he commuted between Mexico and the Eastern Shore. The Holts easily fit into the social circle of retired, semiretired and weekending executives that has long flourished outside the towns of Talbot County. In 1964, members of the Talbot County Historical Society launched the maritime museum, which became independent in 1968. In 1971, at a cocktail party, Holt was offered a job as the museum's first full-time director.

St. Michaels then was "a nice little town with a lot of potential," Holt said. There were a five and dime and a drugstore, but no gift shops. There was one restaurant, the Crab Claw, adjoining the museum, which consisted largely of a lighthouse barged 60 miles up the bay from Hooper's Island strait.

The locals didn't think much of the museum idea then, Holt said: "We're talking about the watermen, who see nothing glorious or glamorous about their lives. They're not too happy about their rough existence, but it's a folk story that has to be told. They thought it was organized by a lot of rich outsiders."

Nonetheless, the museum caught on. Today, it is accredited and nationally acclaimed. A former boarding house of dubious reputation has been turned into a museum shop. Other old buildings house offices and a maritime library.

The cottage-style lighthouse sits at the point, where a seafood processing plant once stood. Nearby are a bell tower from Point Lookout, a gazebo bandstand from Tolchester Beach and an old railroad building from Claiborne, where ferry passengers boarded trains for Ocean City. The last is now the small boat shed, containing skiffs and other boats with colorful pasts.

There's a waterfowling building that depicts the ways of the infamous outlaw gunners, and a "bay building" that puts it all in historical perspective from prehistoric to modern times. A "propulsion building," to illustrate the age of steamboat engine power on the bay, is nearing completion, and a working soft-shell crab shedding operation is also planned for the site.

Holt hopes to see artisans, such as blacksmiths, decoy carvers and netmakers, working there. "People like to see people doing things," he said. "The life here is changing radically. That's why we're putting up Watermen's Village. Not only preserving buildings but skills of the past."

Holt's retirement party last month drew 200 people, including Sen. Paul S. Sarbanes (D-Md.), judges, local officials and politicians. The staff gave him a pewter plate with an inscription hailing him as a man "who took a modest opportunity, applied great vision and built a heritage."

Then last week, as Holt was packing up his books and papers, Larrimore appeared. The museum owns a fleet of 70 boats, most of them donated. Some are restored and displayed, others are sold to increase the endowment. But there are only so many old boats even a museum can handle.

Larrimore's 1911 skipjack was not one of them. But the man himself was on the way to becoming a living symbol. As he descended the stairs from Holt's office, he noticed old photographs of working sailboats lining one wall.

The way things are going, Larrimore said, "It's going to be all you can do, remember. We're going to be up with all those pictures. Just a memory."