After 4 1/2 years of totalitarian rule, Chile has entered a period of reform that for the first time promises more than cosmetic changes and has already allowed greater freedom in daily life.

While much of the legal and military apparatus that gives the ruling armed forces junta its power remains intact, the past several weeks have brought a series of liberalizing decrees, including:

An end to the state of siege imposed following the September 1973 coup.

The anticipated release into exile of more than 200 political prisoners.

The publication of a new constitution, to be put to a national referendum, by the end of next year.

Perhaps most significantly, recent weeks have been marked by a feeling of positive momentum that has long been absent in Chile.

"For the first time in four years things are exciting here," said a businessman over dinner in one of Santiago's cozy, Spanish-style restaurants.

Some of the most visible signs of the excitement are found on the city's newsstands, where headlines trumpet daily developments in the Letelier murder case and chronicle skirmishes in a growing battle of political wills between President Augusto Pinichet and other members of the government.

Both of those topics would have been taboo under a previous media code of prudent self-censorhip that appears now to have been thrown to the winds. Suddenly, chileans are not only geting some news in their papers, but are openly discussing issues that before were only mentioned in whispers.

Officials say the government is considering tearing up its "blacklist" of 24 foreign journalists barred from entering the country for reasons ranging from unsympathetic reporting to suspicion of communist affiliations.

Two weeks ago, Pinochet himself gave his firse informal press conference over dinner with the resident foreign correspondents' association. His unusually good humor caused more than a few lifted eyebrows behind his back.

The road to liberalization, the president said in a recent speech to the nation, has been paved by Chile's growing political and economic Stability. Not only was he given massive backing in a recent referendum, Pinochet said, but his government has also reduced inflation from a 1,000 percent high in 1973 to 30 percent predicted for this year.

More immediately, however, the reforms appear to be Pinochet's direct response to increasingly public challenges by other junta members to his authoritarian personal power, and to international human rights pressure that has isolated Chile and complicated its relationships with other countries.

An obvious catalyst in the reform process has been the six-week U.S. investigation here of possible official Chilean involvement in the bombing death in Washington of exiled former foreign minister Orlando Letelier.

Several weeks ago, nervousness about the possible implication of high officials, including perhaps Pinochet himself, in the 1976 slaying led to discussion in progovernment circles of possible substitutes for the president and plans to survive his removal without a government takeover by the leftist forces the military ousted in 1973.

Faced with the circumstantial implication of guilt if it failed to co-operate, Chile last week turned over an expatriate U.S. citizen, who allegedly worked for Pinochet's secret police, for questioning by U.S! authorities.

While the extent of Chile's official involvement in Letelier's death is still in question, according to U.S. investigators, a well-informed government supporter called the American probe a "happy misfortune" that caused the government to "take measures it wouldn't otherwise have taken."

One of those measures was last week's appointment of a civilian attorney as interior minister and chief of the Cabinet, and the announcement that other civilians would be considered for posts previously held by the military.

While substantial reforsm have been either announced or carried out, much of the repressive mechanism remains. The lifting of the state of siege theoretically gives civilian courts greater powr to scrutinize repressive police and military activities and ends the government's right to banish critics.

A "state of emergency" remains in force however, allowing the government to hold anyone of for up to five days without charge. Union elections, strikes and collective bargaining are still forbidden. Political parties are still outlawed, and a Chilean caught handing out pamphlets criticizing the government still faces arrest and stiff sentences under "national security" laws.

The lifting of the 2 a.m. curfew has been announced for nonmotorized movement in what Pinochet explained as an "energy saving" restriction. At the same time, the special 3 a.m. Saturday night curfew seems to have been moved up an hour without announcement. One confused Santiago resident reported being stopped by equally confused police four times last weekend while driving home during the newly-prohibited 60 minutes.

Unexplained disappearances, a problem that is largely responsible for the bad human rights image, seem to be largely a thing of the past in Chile.

According to a respected Catholic rights agency, only five persons were arrested for security reasons in March.

Reports for the last three months, however, indicate that the National Information Center (CNI), which replaced the feared secret police agency DINA last August, has been operating in much the same way as its predecessor, albeit less extensively.

While the CNI is expressly forbidden arrest powers, five persons recently signed affidavits saying they had not only been arrested by the agency in February, but had been taken to DINA's notorious Villa Grimaldi interrogation center where they were subjected to electric shock, drugs and beatings during questioning. The five were later turned over to civilian police.

While the government has announced plans to release into exile approximately 220 political prisoners convicted by military courts, it has facilitated the return of some current exiles.

Three weeks ago, Socialist Party leader Carlos Lazo, serving a 30-year sentence for treason and sedition, was released and left for France. Several days later, a leading Christian Democrat, Jaime Castillo Velasco, was allowed to return to Chile after 18 months of exile in Venezuela.

Two days after Pinochet announced that a constitutional draft would be released by Dec. 31, an outline of the expected document was released. It called for a strong eight-year president with extensive power over a partically elected legislature.

The proposed constitution is to go into effect following a plebisate and a "transition" period of undefined length. In a speech last year, Pinochet outlined a complete return to elected civilian government by 1991.

The constitution announcement followed three recent speeches by junta member Gen. Gustavo Leigh recent speeches criticizing the lengthy time-table of the return to democracy. Leigh is commander of the air force.

According to aides, Leigh's complaint with army commander Pinochet, which they said is supported by the entire air force leadership, is not necessarily the lack of democracy and elections in Chile. Leigh, they said, objects to the lack of a constitution, the observe of which permits expansion of the president's power at the expense of his fellow junita members.

Leigh is believed to feel that Pinochet's hunger for power, facilitated by the president's secret police and unilateral rulings, have been responsible for the negative international image that is beginning to cause Chile serious problems.

After years of appearing to offically ignore what the rest of the world said about it, Chile is feeling its lack of friends deeply. Recent Chilean appeals for public support on a question of international law in an ongoing boundary dispute with Argentina brought sharp refusals from a number of ostensibly neutral countries, including the United States.

The reason, one diplomat said, was not that the Chilean position did not merit support, but rather an international reluctance to support Chile on any issue.

The United Nations recently condemned the junta for the fourth year in a row. Bolivia just broke relations with Chile and, in the face of an increasingly situation with Peru in the north, Chile finds itself with few countries to turn to for backing.

In a document distributed last month, the Christian Democrats said that this isolation posed a threat to Chilean national security. Criticism of Chile has Eastern blocs, as well as from much of Latin America, the document voted and it is no longer possible for the junta to blame its problems on "communist infiltration" and propaganda.

"The truth is," the document said, "that we find outselves not only isolated, but rejected."