In this tiny, overpopulated Central American land of gratuitous kidnappings and incessant assassinations, stories of atrocities, rumored or real, have become a normal part of life.

While the standard of savagery that has claimed 16,000 lives in a year and a half is generally a bullet to the head, hardly a day goes by without some of the dozens of bodies found every morning on city streets or along country roads showing signs of mutilation.

In such a climate of horror, it has become possible to believe almost anything. Any street rumor or report heard on foreign or clandestine radios gains a life of its own that no amount of official denials can shake.

Nowhere had this been more evident than the reports in recent weeks that have grown in acceptance, if not in evidence, of a massacre of 1,500 Salvadoran refugees sealed in an isolated cave by government soliders somewhere in the mountainous north along the border with Honduras.

The vagueness of the reports of the alleged massacre has proven their biggest strength, defying investigations that might establish whether there is any truth in the embarrassing claims, which El Salvador's government has denounced as "lies orchestrated by the international propaganda machine" of the leftist rebels it is combating in the countryside.

The first account apparently came from Honduran chuch and human rights groups. It claimed that in late March Salvadoran troops had either bombed or dynamited shut the entrance to a cave where 1,500 refugees had sought shelter. The initial report from Honduras identified the cave as Cueva Pintada (painted cave) and said it was located between the towns of "Yarutela and Santa Helena."

Unfortuantely, that and other information provided has been misleading if not downright false.

According to the official, comprehensive "Index of Geographic Locations of El Salvador," which lists not only the smallest hamlets in the land but also its most prominent geologic features, there is no record of a Cueva pintada, which, to accomodate 1,500 persons, would have to be a major, and thus known, cavern.

The index also fails to show the existence of any town named Yarutela. It does list 27 villaged by the name of Santa Helena, though 23 are far from any borders and the four that are in a border area are all in Santa Ana Province -- which is on the Guatemalan, not Honduran, frontier.

Thus the data on the location of the alleged massacre in the initial report defied investigation. A second report, however, broadcast on the rebels' clandestine radio, said that the massacre had occurred in a cave near the town of Yarula, in Morazan Province, one of the strongholds of the leftist guerrillas along the Honduran border.

Maps and the index show that there is a town of Yarula. It is not in Morazan, however, but to the southest in the province of La Union. Although the providence does border Honduras, Yarula is not near the border at all and is in an area not noted for any caves.

Continued reports of the alleged massacre, now broadcast by Havana Radio and taken up by human rights groups including Amnesty International, repeated that the incident occurred in Morazan, prompting U.S. officials here to attempt to check it out.

Morazan is a province where one travels the roads at great personal risk, so the Salvadoran armed forces provided facilities and security for a U.S. Embassy official to go to northern Morazan, in an area known as the Sabanates Bolson, where the cave -- or caves as later stories asserted -- is still though to be. The vice consul, who visited the area two weeks ago, reported that his talks with people in several towns in the area -- but not in Yarula -- turned up no evidence to corroborate the massacre reports.

Defense Minister Col. Jose Guillermo Garcia, the Salvadoran strongman who has been accused by many of either ordering, or at the least tolerating, brutal excesses by his troops in the countryside, denounced the allegations as "a fallacy, a lie of the orchestrated propaganda machine of the subversives to distort international opinion."

The defense minister cited the lack of evidence found by the U.S. vice consul in Morzan as proof that the massacre report was false.

The consul's brief investigation, however, proved nothing conclusively, beyond his statement that in the region he visited there was no evidence of a massacre.

Garcia's denials, and allegations that the charges are part of an international propaganda campaign tend to echo the Reagan administration's belief that world communism is conspiring to give the Salvadoran government and its U.S. backers a bad name. At the same time, however, past reports of massacres, similarly denied by the government, have proven to have had at least a grain of truth.

Although Garcia heatedly denied international human rights reports last spring that as many as 600 Salvadorans fleeing over the Sumpul River into Honduras had been shot by government troops, reporters and independent observers were barred from the scene for weeks. Later, Garcia said that some people had been killed, but not in such "industrial quantities." Last month, a Salvadoran Cabinet minister visiting Washington told reporters that 135 Salvadorans had been killed.

International aid organizations working with Salvadoran refugees along the Honduran border believe that an event, involving a cave or caves, and a large number of massacred refugees, did occur late last month, but they provide no firm indication of where how many were killed.

Amnesty International's New York office says that it simply received word of a possible massacre, and disseminated it to other agencies, including the Inter-American Human Rights Commission, without vouching for its veracity. The commission in Washington says it has sent the charge to the Salvadoran government for reply.

Meanwhile, the National Catholic News Service, an aggressive chronicler of proven and alleged human rights abuses in Central America, last week issued a release "confiming the massacre of diplaced persons on April 4-5 at Cueva Sentada on the El Salvador side" of the border with Honduras. aThe release, which said its information had come from a priest in the region, stated that "a large number" of Salvadorans trying to flee into Hondoras died when strafing Salvadoran government aircraft forced them "to seek cover inside a cave and surrounding underbrush."

Soldiers sealed off the cave entrance, the release said, and threw tear gas bombs inside. "In two days," many of the refugees "were dead from asphyxiation. Those who tried to escape were killed by gunfire." The release quoted another source as saying that 150 persons died.

In El Salvador, where death and atrocity have become common, the tragedy is that nothing seems incredible anymore; all horrors are accepted as plausible.