From the moment the crumpled man entered the inner offices of the fortress-like U.S. Embassy here, tearful and almost unable to walk, according to one staffer, it was known that his story was potentially explosive.

The man, a volunteer for a Salvadoran humanitarian organization, gave an account of being tortured by the Salvadoran National Police. The subsequent embassy report to the State Department was leaked to the press in Washington last week, presenting a dilemma to several U.S. diplomats and the department.

"Your policy is that the United States cannot accept torture, and the other side is that the United States perceives vital interests at stake in El Salvador," said one American diplomat. "How do you reconcile one with the other?"

Some top U.S. diplomats now also contend that disclosure of the case has upset the embassy's delicate relations with the Salvadoran military, and they wonder aloud whether their reports can or should be frank if they will be leaked in Washington.

Interviews with American officials about how the report was written, and how it was received in Washington before it became public, indicate other problems: the continuing insularity of the embassy staff; a concern among some officers about "writing to policy," or slanting reports to fulfill Washington's policy expectations; and, at its roots, what some feel are the inherent contradictions that appear in U.S. policy when it comes down to concrete cases such as this one.

Sources here say the report on the volunteer for the Salvadoran Green Cross went to Washington promptly and "straight," without altering the sometimes gruesome details of the man's allegations about being confined nearly a week in secret National Police cells.

As one source put it, "There was a debate about what we should do about it" and a flurry of cable traffic between the embassy and Foggy Bottom once the report was received.

The report was given the very high classification of "Nodis"--not for distribution.

"Only about a dozen people were ever supposed to see it," said one American diplomat here. Embassy officials said this was partly to protect sources, especially the alleged victim himself, whose name was changed in the report and who was subsequently given a U.S. visa so he could leave El Salvador.

There was also the general desire to protect policy, according to U.S. diplomats. At least one official concerned with the case was looking down the road to the required Reagan administration certification of an improving human-rights situation here. The certification was made last week.

And there was the specific intent, diplomats here said, to preserve the embassy's good relations with the commander of the National Police, Col. Reynaldo Lopez Nuila. A top U.S. official described Lopez Nuila as "one of the best people in this government" despite a case "six or seven months ago" that the official said "went straight to the National Police" and was "horrible." The official declined to elaborate.

Lopez Nuila frequently has been credited by U.S. officials with doing more to clean up his branch of the security forces than any other senior officer in the Salvadoran armed forces. They note that he is cooperative, answering inquiries and apparently acknowledging detentions made by his units.

Once the testimony was in hand from the volunteer for the Salvadoran Green Cross, however, and the National Police denied the allegations, the embassy was faced with questions that remain unresolved.

Either Lopez Nuila had set up an elaborate screen over the last three years for an operation that was really conducting torture, or this is an isolated incident, or he did not know what is going on in his organization, or the Green Cross volunteer was lying.

"What's true in this place and what's not true? How do you find out? Everybody knows, but no one has any evidence," said one senior U.S. official ruminating about the case.

Embassy officials were reluctant to say whether they had made any attempt to visit the suite of secret, soundproof cells allegedly located on the third floor of the National Police headquarters, where the volunteer said he was held.

An embassy spokesman said, "I don't know, and if I did know I don't think I'd want to go into it."

Another diplomat said that an effort was indeed made, but "we didn't see them the cells ." Asked if this was because they couldn't find them or because they were not permitted to look thoroughly the diplomat said, "That's about all I can say."

Much of the Green Cross volunteer's credibility rests on the fact that he was known previously by at least one member of the embassy staff. Although no medical examination was conducted, said the embassy officer who interviewed him, "the guy would have had to have been the best actor in the world" to simulate the evidence of crippling pain, the spontaneous tears and sweating the officer said he saw during the interview.

The embassy officer who knew the alleged victim described him as an evangelical Christian. He reportedly said he probably was picked up because of a general harassment campaign mounted by authorities suspicious that the Green Cross has links to the guerrillas and because on one occasion, when stopped by guerrillas, he gave them a small quantity of milk--an act witnessed by bystanders.

The officer said the man appeared to have recovered from his injuries when he saw him in June, after the report was filed and shortly before the man left the country.

"On a scale of torture from one to 10, I'd give this man about a six," said one diplomat. But he noted that among the embassy staff there seemed to be a special significance in the fact that the man actually came inside the embassy, within the concrete-and-steel facade--as if the daily violence in El Salvador were normally shut out.

"When things happen in the building, it's somehow more significant to the embassy than when they happen out in society, at one step removed," said one American diplomat.

Still, a senior Foreign Service officer concluded, "I think we all know without having any solid evidence that lots of horrible things happen."

Ambassador Deane Hinton was visiting Washington when the case broke and read the incoming traffic. Hinton, on his return here, made a specific protest to President Alvaro Magana about the incident and warned that such actions could have a serious effect on U.S. support, according to an embassy source.