After five months of searching, North Carolina officials have decided where they want to dump 40,000 cubic yards of soil contaminated with toxic PCBs -- in a county with some of the state's highest unemployment, the state's second lowest per capita income, and which also contains Floyd McKissick's Soul City.

But the plan, which must be approved by the U.S. Environmental Protection Agency, has run into a storm of local opposition. None of the about 650 Warren County residents who attended a seven-hour public hearing here Thursday night defended it.

"Do we want to become the cesspool of the South?" asked Glen Newsome, manager of the mostly rural, predominantly black county about 50 miles northeast of Raleigh. He called the state proposal "a shame and a disgrace."

The problem of getting rid of the PCBs (polychlorinated biphenyls), which were illegally dumped by truckers along 211 miles of state roadsides last summer, has become politically embarrassing for Gov. James B. Hunt Jr. A state official was relieved as project coordinator this week after he announced that the state would go ahead with its plan despite public sentiment.

PCBs, used primarily as a heat retardant in electrical equipment, cause skin and internal disorders in humans and have been linked to birth defects and cancer in laboratory animals. The chemical can enter the body through inhalation, ingestion or absorption through the skin, and does not easily break down in the environment. PCB production in this country was stopped in 1977.

Hunt promised in August that the state would clean up the spilled PCBs as soon as possible. An asphalt mixture was poured onto the contaminated areas to minimize health risks and runoff, but only one mile has been worked on so far. It is unclear if the PCBs still on the road pose any danger.

More than 50 speakers, including the chairman of the County Commission, attacked the state proposal to buy 142 acres of private land for $1,000 an acre to establish a PCB dump site on what is now a soybean field.

The plan was announced here Dec. 20, only after officials had negotiated to buy the land. One man suggested, to loud cheers that the PCBs be dumped on Hunt's farm in nearby Wilson County.

"If it means we have to stand bodily in front of buildozers, trucks and moving equipment, to give our very lives to save lives in the future, I say it is our right and our duty to sacrifice ourselves," thundered the Rev. Willie Ramy, pastor of two local churches. Shouts of "Amen, brother!" greeted the suggestion.

Another speaker, Ken Ferruccio, leader of a local group called Citizens Concerned about PCBs, said he would urge residents to declare themselves "a free and sovereign people," if the state persists in its plan. Others read from the Declaration of Independence, the Constitution and Rip Van Winkle.

Dr. Charles Mulchi, a University of Maryland soil scientist who grew up in Warren County, told the crowd that the plan was unsafe because the state has requested waivers on three EPA minimum safety requirement.

He warned that the PCBs could leak into the local water table, which he said lies about seven feet below the proposed dump site. EPA requires a 50-foot separation.

State officials insist that the plan is safe, however, and say the proposed waivers will not be a danger, because the dump will be used only once and because compacted clay will prevent seepage.

John White, EPA regional administrator, said he will make a decision on the plan by Jan. 25. "We're going to take a hard look at all the options," he promised.

Because of the quantity of contaminated soil involved, the logistics of the $2.5 million state plan are staggering. It would take about 10,000 dump truck loads to move all the soil, according to transportation officials. If a local site cannot be found, the nearest EPA-approved dump site is 800 miles away in Alabama. Officials say it would cost about $12 million to move the PCBs there.

More than two thirds of Warren County's 17,000 residents are black or Indian. Per capita income in 1976, the last year figures were available, was $3,656, second lowest in the state's 100 counties. State per capita income was $5,478. County unemployment last year was 8 percent, as opposed to a state rate of 5.9 percent.

Three Jamestown, N.Y., men, Robert Burns and his two sons, Randy and Timothy, await trial in North Carolina on more than a dozen federal and state charges for dumping the PCBs. The three have pleaded innocent.