Elsie Burgos, a Salvadoran who has lived in Alexandria for years, was enjoying yesterday's Pan-American Festival in Old Town, sitting on the grass amid the Latin dancing, Latin music and Latin food. But she said life for the Washington area's Hispanic immigrants is not always a celebration.

"Life here is very difficult -- especially the language," said Burgos, who makes a living cleaning other people's houses. "It's difficult to pay your expenses while you're out at language classes, and it's difficult to find a job without being able to speak English."

Nearby, Jose Solorsalo was watching the introductions of beauty pageant contestants as music from several bands playing Latin music drifted over and people in the crowd, estimated at 35,000, tried on fast-selling sombreros in the hot sun and ate fajitas.

"Even though life is very difficult here sometimes, it's easier here than where I came from," said Solorsalo, a Salvadoran who washes dishes at an Alexandria restaurant.

Immigrants from Hispanic enclaves throughout the Washington area -- from Adams-Morgan and Mount Pleasant in the District, from Manassas, Dale City and Woodbridge in Virginia, from Hyattsville and Silver Spring in Maryland -- flocked to the third annual festival.

Exact figures are hard to come by, but social service agencies and Hispanic organizations estimate that 250,000 Hispanics live in the D.C. area, making them the region's largest and fastest-growing immigrant group. Against the happy backdrop of yesterday's festivities, many Hispanic leaders say they are concerned about a host of problems in their community, from a lack of health care for the uninsured to a shortage of affordable housing.

One of the Hispanic community's most pressing problems, social workers say, is illiteracy. Central Americans, the largest group among area Hispanics, are also the least educated, they say.

"Many are illiterate in their mother tongue," said Martha Wyatt, director of the Spanish-speaking Committee of Northern Virginia, a Falls Church-based social service agency. "They come here without finishing school, and start working in service jobs."

Many will continue to have poor English skills throughout their lives, she said, and will be stuck working as janitors, in restaurants and in other unskilled jobs.

That basic inability to communicate, Wyatt said, hampers the community's ability to tackle the other problems it faces.

"We're talking about people working two or three jobs trying to survive," Wyatt said. "Once we get past that point, then we can start looking at some of the other issues."

Community leaders also say Hispanic ghettos are developing in several areas. A lack of affordable housing has forced many groups to live together in crowded apartments in the area's least desirable communities, they say.

"Around 1970, I was one of the few Hispanics living in Arlandria," an area on the Arlington-Alexandria border, said Johnny Simancas, director of Hispanos Unidos, a Falls Church social service agency that provides Hispanics with job counseling and housing assistance.

Now, he said, Salvadorans are so numerous in the area that some residents have renamed it after a Salvadoran village.

"When you hear someone say they live in Chirilagua, you know they mean Arlandria," he said.

Once settled here, Hispanics are motivated to work hard to attain the comfortable American lifestyle they see around them.

"They can't often afford to buy a home, but they might buy a TV or a VCR instead," Wyatt said. "It's their way of showing that they're making it in America."

While striving to attain the American Dream, most Hispanics maintain strong ties to their native cultures. Some area Hispanic groups, such as the Bolivians and Mexicans, have formed dance and music groups, several of which performed in Alexandria yesterday.

Salvadorans in the area have formed soccer teams, often bearing the names and uniforms of teams back home.

"For the Hispanics, those soccer matches may be the only opportunity for interaction during the week," said Eduardo Berton, director of multicultural programs for Arlington County.

Alcoholism also is a problem in the Hispanic community. By one estimate, 90 percent of all Hispanic families are touched by alcohol abuse. An estimated 15,000 Hispanics in the area are alcoholics.

"Like every new group, we have problems with alcoholism," said Elena Rocha, an Hispanic community activist from the District. "Every generation of first immigrants are identified with alcohol, but if the whole generation were alcoholics, we wouldn't be able to get up at five in the morning and go to our jobs and come home at 11 p.m."

With economic upheaval spreading in South and Central America, social workers say they expect the influx of Hispanics to the Washington area to continue.

"Every day there are people coming to this area because this is one of the highest-paying areas in the country," Simancas said. "Compared to other areas of the country, there are still plenty of jobs available here."

But as those immigrants work toward attaining the American Dream, events such as the Pan-American Festival help keep them in contact with their native cultures.

"You can still keep your identity and see your traditional dances and eat your traditional foods," said Jorge Lozano, an organizer of the event.

The festival also brings together Hispanics and non-Hispanics for music, dancing and eating.

"By taking part in those kinds of festivals, Hispanics feel they have a place in this society," Lozano said.