Thoreau would have been enthralled; Cervantes inspired. But Tip O'Neill doesn't give a damn.

William A. Barnstead is the Republican St. George come to slay the Democratic dragon, a political Walter Mitty, the Don Quixote of the Massachusetts 8th Congressional District.

"I'm going to make the impossible dream come true," says Battlin' Bill Barnstead, as he calls himself.

Undaunted by apparently hopeless odds in a predominantly liberal Democratic district, he intrepid right-wing former state Republican Party chairman is braced to joust his powerful 13-term congressional opponent , Thomas P. (Tip) O'Neill Jr. (D-Mass.), the speaker of the House.

O'Neill, however, refuses to fight, debate or even answer questions on the same television interview.

"We're not mounting a campaign against him at all," said the speaker's administrative assistant, James Rowan. "I don't even know who Barnstead is. I've never laid eyes on the guy. I wouldn't know him if I stepped on him."

Barnstead, explains his Republican colleague, former governor Francis W. Sargent, is just another one of the "turkeys" and "cuckoos" running the GOP in Massachusetts.

"If being a cuckoo or a turkey means not taking graft and not compromising your principles, then I'm a turkey and a cuckoo," Barnstead says. "But I hope I'm also the goose that cooked the Golden Tip.'

Battlin Bill claims he is waging this Herculean fight for political integrity as part of his "duty to the United States of America and the two-party system . . . because nobody should go uncontested, nobody gets a free ride."

In a campaign gimmick shortly after a massive blizzard here early this year, Barnstead distributed packets of lilac seeds designed to dramatize this cause."

The packages were inscribed: "It's high time we wiped the slate clean and planted the seeds of responsible government, like the buds of April lilacs."

"I refuse to lay down and quit," Barnstead says. "I speak my mind. I'm not the typical mealy mouthed politician."

"As Battlin' Bill's campaign literature puts it: "We need a voice for the district - not a speaker in the House."

As Battlin' Bill tells it: "I told them all to go to hell in both parties - including the speaker of the House.

"His attitude is, 'who the hell is Bill Barnstead to have the nerve the audacity to run against me?' He thinks he's Jesus Christ - and he's not. He's the devil on earth, and he knows how bad he is."

As O'Neill aide Michael Ralph explains it, "If his objective has been to be the thorn in the speaker's side, he has not even pricked the skin. His effect on O'Neill is nil. His candidacy is a failure."

Barnstead, however, notes, in a conspiratorial voice, "I have it on good source from O'Neill's druggist that he is buying twice as much Maalox since I announced."

Coming off a devastating defeat in 1976, in which he got only 20 percent of the vote against O'Neill, Barnstead announced his second shot at the speaker early last summer by burning a dollar bill at a press conference.

Dressed in a firefighter's helmet and carrying a fire extinguisher, Barnstead declared his candidacy to help "put out the fire of inflation."

"In Washington," he said, "they are burning up your money, and Tip is leading the congressional arson squad."

Two years ago he dramatized his opposition to O'Neill's probusing position by announcing his candidacy in front of a school bus.

Barnstead's fiery rhetoric and sophomoric antics have earned him a steady decline in local media coverage. However, his constant hounding of reporters has led to stories by The Boston Herald-American and a television news investigative unit that raise questions of impropriety and conflict of interest in O'Neill's business dealings.

Barnstead says his obsessive quest to uncover O'Neill's "dirty linen" is merely a hobby that he will cintinue to pursue as long as his business - a medical equipment manufacturing firm - remains successful.

"I don't smoke, I don't drink it excess and I don't play cards anymore," he says. "This is my hobby - you've got to do something to keep from growing old, and if you get good government in the process, well so much the better."

His campaign is run on a shoestring, with a $10,000 budget, including $1,000 each from Ronald Reagan and the Republican National Committee. "If I spent $500,000, Tip would spend a million," he says, "so what's the use?"

He advertises sparingly in local weekly newspapers, relying mostly on the aid of a small but dedicated cadre of followers who distribute literature from door to door.

Barnstead's campaign schedule is also a haphazard affair with the candidate preferring to spend much of his time "researching" his opponent and writing news releases that rarely get printed and aired.

From time to time, he takes his campaign to shopping centers to meet the voters.

"Hi, I'm Bill Barnstead, and I'm running for Congress against Tip O'Neill. You know he's been in office 26 years, and he's finally found the cookie jar, he's got the cover off and how he's dipping - taking your money and mine."

Each voter gets the same pitch. Each time there's a smile for a reply. Barnstead figures he can parlay the smiles into votes Tuesday "if I could just get past that Republican "if" next to my name. Boy, would Tip be shocked.

"Aw, but it's hopeless, you can't beat the guy," he says in a moment of gloom. But bouncing back quickly, he says. "You know, the response is much better than last time. Two years ago they snapped and yelled and sneered and cursed at us. They even threw tomatoes."