Eight years ago, Portugal's young Army officers seized power after half a century of dictatorship, committed their revolution to building socialism and made the military and the left the dominant political powers.

Today, the "Revolution of the Carnations" is an increasingly distant memory.

Portugal has in recent weeks rewritten its constitution, removed the military from its official role as government overseer and become a full-fledged democracy with squabbling political parties to prove it.

These moves have taken away a substantial part of the power of the popularly elected president, Antonio Ramalho Eanes, an Army general who is now locked in a bitter struggle with the politicians over the legacy of the bloodless April 1974 coup that was welcomed by Lisbon's populace with showers of floral bouquets.

Portugal is no longer the crucible of ideological upheaval that moved Henry Kissinger in 1975 to express fear that the country was "lost" to communism and to demand that NATO exclude the Portuguese military from top-secret gatherings.

In the meantime, this stubby land on the edge of the Iberian Peninsula has been trying to find a livable balance of internal forces and to address the financial problems that plague the entire Western world.

But if the past few years have been difficult, the current battling among Portugal's newly unfettered political forces is likely, in the view of a broad spectrum of political, business and military leaders interviewed here, to make things worse, at least for the short term.

In a narrow sense, the issue where the lines of battle are drawn is the economy.

Portugal has a serious and growing debt burden, the lowest per capita income in Western Europe and inflation at 23 percent and rising.

More broadly, the issue is the extent to which Portugal's economic socialism, within democracy, will survive.

The new constitutional revisions dismantled the institutional structure of the revolution. They abolished the Council of the Revolution, the military body established by the young officers in their "revolutionary" constitution, which gave them control over the armed forces and the power to pass final constitutional judgment on all Portuguese law.

The revisions also took away a substantial part of the power of President Eanes, who could, in the name of the revolution, veto laws and dismiss the government.

Prime Minister Francisco Pinto Balsemao's center-right government pushed through the changes, over Eanes' opposition, with the help of votes from the opposition Socialist Party.

Although the Socialists had their own reasons for helping to dismantle the power of Eanes and the military, they coincide with the president's opposing Balsemao's attempts to remove the revolution's economic pillars -- the "irreversible" nationalization of most business and industry, expropriation of large land holdings for peasant cooperatives, and the virtual impossibility of firing or laying off workers.

Although Eanes disagrees with Balsemao's proposed solutions, he agrees there is a problem. "Portugal has an identity crisis," he said in an interview. "People find the revolution has not fulfilled their needs, has not ended the anxiety. There is a feeling of frustration, and I would say the crisis will become even deeper than it is now."

One of Balsemao's Cabinet ministers put the current power gridlock another way. "It's not really a crisis; it's something worse. It's a marsh, where nothing moves."

While all hasten to add that they believe the democracy will survive, many leaders see trouble ahead. "By the end of 1983," said the Cabinet minister, "people will be starting to react . . . not with strikes, but with a general depression and a sense that there is no way out."

A military officer, once a figure in the revolutionary administration, predicts that "within three years, we could have a Polish situation here."

Despite Portugal's long and varied background, history here seems in many ways to have begun with the revolution, and it is in the hopes, the disappointments and the perceived betrayals of that process that one finds the roots of the current struggle.

Although the junior military officers who took over in the April 25, 1974, coup began plotting in dissatisfaction over military promotions and what they believed were unnecessary and unwinnable colonial wars in Africa, they were sufficiently politicized to believe that they were not the only ones mistreated under the half-century-old dictatorship of Antonio Salazar and Marcello Caetano.

In the name of Portuguese workers, they somewhat ambiguously defined the country they wanted to build as a "democratic state . . . based on pluralism" but dedicated to "the aim of attaining a classless society."

It took nearly two years of political upheaval, including a narrowly averted Communist takeover, to develop the institutions that would guide the revolution. When the dust settled in 1976, the African colonies of Mozambique, Angola and Guinea-Bissau had gained independence.

The nationalizations and expropriations had wrested economic control from the traditional elite. A new labor code guaranteed employment security, and the Communist Party had found its place in the Portuguese spectrum not as government but as watchdog for the rights of the workers.

The officers created a hybrid system of government designed to avoid what they saw as the mistakes of the past -- a collapsed republic in the early part of the century, followed by dictatorship.

"We tried to have a balance between the sovereign organs," recalled Vitor Alves, an Army major in the Armed Forces Movement when it led the 1974 coup and now adviser to Eanes.

The parliamentary republic had failed miserably, "but we didn't want a presidential system," Alves said. "Everybody in Portugal knows what that means."

Power was thus balanced between the two branches, with the president given extra cachet by virtue of his membership in the Council of the Revolution--which was established by the captains to oversee the transformation from dictatorship to democracy.

Although it also included the chiefs of the three service branches, the bulk of its 19-man membership came from the Armed Forces Movement. The council was to advise the president, run the armed forces, and be the final word on the interpretation of the 1976 revolutionary constitution, with powers to nullify legislation before it even became law.

The young officers plucked Eanes from relative obscurity, as an honest representative of revolutionary thought, for the 1976 presidential elections. His nonpartisan candidacy was supported by a number of political parties, including the Socialist. That party won a plurality in the legislative assembly and formed a government under Mario Soares.

The soldiers said they had no desire to stay in government forever. The council would exist, the movement said, until the newly blossoming political parties--long banned under the dictatorship -- were sufficiently on their feet to make democracy work and revise the constitution.

It was several years before that prospect was seriously considered. By late 1979, the Socialists had fallen twice under parliamentary defections and a failing economy.

Eanes appointed three interim governments in rapid succession before the 1980 elections brought the Democratic Alliance, a center-right coalition of Social Democrats and Christian Democrats, to power.

The alliance won on a platform of constitutional change, arguing that a modern democracy, hoping for membership in the European Community, could not survive with a constitution that read like a Third World manifesto and prohibited even a mixed economy.

It also maintained that an elected, civilian government could not operate efficiently with a military council hanging over its head, empowered to nullify its every move, nor with a president whose powers they found excessive.

The next 18 months were a many-sided tug of war. When the alliance proposed the development of private-sector industries, the Council of the Revolution said no.

When wage and price freezes were proposed, the Communist-dominated labor unions, business and even the public sector, said impossible. Meanwhile, the coalition members fought among themselves over Christian Democrat-backed social issues -- leading Balsemao briefly to resign in a huff last year -- and the Socialists nursed resentment over their losses.

Approval of the constitutional changes, with the Socialists providing the necessary votes for a two-thirds majority, came last summer through parliamentary agreement that the military council, and much of Eanes' power, must go before other problems could be addressed.

Although the council tearfully, but dutifully, dissolved itself on Oct. 29, it issued a lengthy broadside against the revisions that was published here with the reverence due the heroes of the revolution.

Eanes went on television to denounce the new restrictions on his powers, and to warn that his patience with the government was running out.

Blocked for the moment from structural economic change, the Balsemao government has begun a series of end runs around continuing prohibitions on denationalizing money-losing industries: from TAP, the national airline, to the steel industry and firms that produce beer and cement.

The plan, sources said, is to reduce budgeted payments to at least some of the nationalized companies, watching them fail or become more efficient, while giving permission to private enterprises to start up in competition.

Balsemao is discouraged, but not yet bowed. "The president has not presented a true alternative" to what the government is offering as a way out of Portugal's political and economic problems, he said in an interview.

If that offer is not accepted, the prime minister warned, then the president, the opposition, and dissident members of his own coalition "will assume full responsibility."