WHAT IS GOING ON here? Has the Reagan administration seen the light? Has it been chastened by the sight of two dictators in flight? Has it finally dawned on them that blind support of odious strongmen repels the world and encourages the onset of communism?

This wild surmise is occasioned by a sudden turnaround in our approach to Chile and its bloodthirsty leader, Gen. Augusto Pinochet. After years of abstaining from voting against any United Nations condemnations, our side is introducing a resolution of its own and pushing it hard before the U.N. Human Rights Commission in Geneva. Quiet diplomacy, the State Department's new human rights ambassador, Richard Schifter, said out loud, has not worked. We are going public against the beast.

What does it all mean? We'll know more only later.

Some say that it is because we have a splendid new ambassador in Santiago, Harry G. Barnes Jr., who has makes no secret of his revulsion to Pinochet and consorts openly with the opposition, which is trying to restore to Chile the democracy it had enjoyed for a century -- until we intervened to overturn the Marxist government of Salvador Allende.

Barnes came to Washington two weeks ago with a draft of the resolution and asked support from members of Congress.

Everyone agrees that the acid test will not come until June. That is when a decision will come on the question of loans from the multilateral development banks, which with our blessing, have been ever so generous with the brutes, awarding them .1 billion in loans and loan guarantees just in 1985.

This year Chile has applied for a loan of $723 million to build roads.

If we abstain or vote yes, as has been our way, we can conclude that the administration was simply reaching out for a little protective coloration on human rights, a consideration which has always played second fiddle to terrorism.

Behind this week's startling development is a little history of a split within the administration, with the Treasury Department, surprisingly, raising the torch for human rights and State trying to put it down.

In a confidential Jan. 10 memo to State's Assistant Secretary for Inter-American Affairs Elliott Abrams, Assistant Treasury Secretary for International Affairs David Mulford cited "unfavorable development in Chile's human rights situation" and urged "a review of our policy regarding U.S. voting on multilateral development banks loans to Chile."

Mulford's boss, Treasury Secretary James Baker, had been given an earful on the appalling state of affairs in Chile by Senator Edward M. Kennedy (D-Mass.), who on the eve of his turbulent visit to that country.

Abrams, who formerly headed State's human rights office, told Mulford in a confidential reply, that "it is important that you be aware of all the information available, and not just that presented by critics of administration policy."

But he appended a cable from the U.S. Embassy in Santiago that contained ominous new information: "Ambassador Barnes says the emergence of clandestine terrorist squads which have arrested, kidnapped and tortured people, is one of grave concern. These 'intelligence' squads operate with impunity, and human rights groups assume they have some connection with Government security forces."

The chairman of the House Subommittee on International Development Instituions, Stanley N. Lundine (D-N.Y.), and its ranking Republican member, Douglas Bereuter of Nebraska, jointly wrote to Abrams urging action on Mulford's appeal to "alter our voting policy on Chile."

But Abrams, when he appeared before the committee, was, in Lundine's words, "very arrogant and very difficult."

Abrams, never considered a zealot for human rights, was pushing the line that progress towards democracy, which he seemed to divine, would assure human rights. He also suggested that while the law governing international development banks prohibits loans to countries with a pattern of human rights violations, the Congress must take care not to politicize the banks.

Mmebers found this amusing in the light of administration's strenuous and successful efforts to block loans to Nicaraguan farmers.

"The trouble is," says Lundine, "that we have been so preoccupied with Nicaragua we have paid no attention to Chile. The administration is always ready with excuses for Chile. After Pinochet lifted the state of siege last June, a new loan went through within 48 hours."

And what now? Lundine is skeptical. "I am delighted the administration is standing up publicly against torture and terrorism . The real question is whether it is going to make the policy meaningful by opposing the bank loans."

Bereuter thinks it is for real. "It should be accepted as a very important action, and very appropriate."