Richard Queen, the American hostage flown out of Iran this morning, could have been treated here, but his Iranian doctors feared he was suffering from either encephalitis or multiple sclerosis and required more "sophisticated" care, according to one of the three physicians assigned to his case.

The medical source, who declined to be identified by name, said chances of recovery from encephalitis, a brain inflammation, are better than 50 percent, but multiple sclerosis, a progressive disease, is incurable "in either the United States or Iran."

Multiple sclerosis, while incurable, is treatable and its progress can be retarded medically.

The doctors submitted their report to the Ministry of Health, and within less than 24 hours, the 28-year-old vice consul from New York had left the country after being held hostage for 251 days at the U.S. Embassy.

After countless setbacks in previous diplomatic attempts to release some or all of the hostages, the government moved with "surprising speed" to send Queen home, one source said.

The doctor said preparations for his release had not been completed by the scheduled departure time of the Swissair flight that would take Queen to Zurich. The plane had to be delayed for 50 minutes, until 9:30 a.m., when Queen was brought to the airport from Martyrs' Hospital in the northern section of the capital.

Officals and Western diplomats were careful not to read into the release any indication that the remaining 52 hostages held in the American Embassy here and in other locations in the country since Nov. 4 would be released soon.

The view was that the resolution of the hostage crisis was still up to the parliament and that would take time since the legislature, which first met in late May, is still wrestling with procedural problems before being asked to approve a new prime minister, probably within the next two weeks.

"At least there is one less hostage" in Iran to be concerned about, a diplomat said, and guardedly conceded that there is a possibility a humanitarian gesture could lead to further movement.

A Foreign Ministry spokesman was at pains to show that the ministry played no role in the release ordered by religious leader Ayatollah Ruhollah Khomeini. That was taken as an indication that the release was not a victory for diplomacy but simply a humanitarian gesture.

A student spokesman said in a telephone interview from the American Embassy, "Queen was released because he was ill. The other hostages are well."

Iran moved speedily to release Queen even though two neurologists and a psychiatrist examining the patient at Martyrs' Hospital could provide no positive diagnostic evidence of encephalitis or multiple sclerosis.

An Iranian doctor involved in the case who was trained at Georgetown and UCLA, said that was not unusual and the determination that Queen suffered from a viral or "degenerating disease" was based on his symptoms and clinical analysis -- the "sense of a doctor."

The doctor discounted the possibility that Queen may have been malingering.

The key symptoms were dizziness and imbalance of gait which were tested by a variety of means, including having Queen walk and also having him stand with one heel on the other shin.

Still, in a country noted for its cynicism, some felt the release was more political than medical since Queen's illness allowed a concession to be wrung from the militants through the use of expert medical opinion. Had Queen become critically ill after the students refused to believe him, it would have been a serious setback to their cause and possibly their standing with Khomeini, the country's overall leader.

"Iranians are very emotional toward the sick," said the doctor.

Another doctor, not on the case but claiming knowledge of it through his association with the hospital where Queen was treated, said: "He had high blood pressure and vomiting. Nothing more." Nevertheless, the doctor made it obvious that he approved of Queen's release.

Queen boarded his flight to Zurich here this morning without medical assistance but he was taken off the flight in Switzerland on a stretcher.

In a brief television interview before boarding the flight, Queen said, "I feel a lot better now in the past hour."

He was accompanied on the flight by Jorg Lauren Kaufman, head of the U.S. interest section of the Swiss Embassy. Said Sanjabi, an official in President Abol Hassan Bani-Sadr's office, represented the Iranian government for the departure.

It became apparent in interviews with a number of officials and medical sources that Queen and the militants were on good terms during his hospitalization that began Monday. Two students guarded him in Room 203, a semi-private chamber in the women's ward that he occupied alone.

Queen said, "I'll come back to Iran and visit since my friends were students," adding that he planned to invite them to his wedding "if I get married."

The interrelationship between the hostages and the militants he alluded to tends to bear out psychiatrists' beliefs that victims and their captors often identify with each other during long hostage seizures.

Queen, who speaks Persian, did not talk about conditions of the hostages at the embassy, medical sources said. Nor did they try to draw him out on the subject.One medical source said the students were "soft-spoken and did not act like militants."

One of the doctors came to ask Queen whether he was nervous, referring to his current illness. Queen interpreted the question to refer to the hostage situation and answered that he had been nervous "at the beginning but not now," according to the doctor.

Tests done on Queen included computerized X-rays and routine blood and urine examinations.

The doctor said hospitals in the United States could do more viral cultures to check for encephalitis and angiography on the brain, which is useful in diagnosis of both encephalitis and multiple sclerosis.

Queen reportedly told one of the doctors that he had episodes of double vision and numbness on the left side of his body for a period of 10 to 20 days, months before the embassy takeover.

The Iranian doctor said there is no reason to believe that incarceration played a role in bringing on the hostage's illness.

Queen was given normal food until he had frequent vomiting problems and then he was placed on a diet for ulcers, a nurse said.

He was put in the women's wing of the 310-bed hospital with a private room because the men's ward contains only wards for eight or more patients and authorities wanted to keep his presence secret.

Martyrs' Hospital, reputed to be the best in the capital, is in Tajrish, the wealthy northern part of Tehran. It is situated in the Elborz Mountains, which protect it from the worst of Tehran's searing summer heat.

Room 203, where Queen spent four days, has a balcony overlooking a vast garden with pool and fountain. After more than eight months' incarceration at the embassy, Queen often sat on the balcony gazing out over a variety of flowers, pines, oaks and weeping willows, a nurse said.