An "Agent Orange education team," set up by the Veterans Administration to explain its views about the health effects of herbicides used in Vietnam, abruptly returned to Washington last week after its first appearance turned into a confrontation with an angry Vietnam veteran.

The dispute at a VA medical center in Philadelphia turned what the agency had hoped would be a publicity coup into an embarrassing fiasco.

The VA created the team to explain to agency employes and others who work with Vietnam veterans why the government does not believe there is any scientific proof that herbicides used in Vietnam (primarily Agent Orange) have damaged servicemen's health.

But as the three-man team began its presentation, a 34-year-old hospital patient demanded to know why the government was buying the dioxin-contaminated town of Times Beach, Mo., if dioxin (an ingredient in Agent Orange) was not harmful.

The veteran, who claims his health problems were caused by exposure to Agent Orange, and several other uninvited Vietnam veterans who attended the meeting, dismissed the team's explanations as "VA rhetoric" and quickly drew the attention of the television and newspaper reporters on hand.

Agency spokesman Stratton M. Appleman later said the VA team was not recalled because of the incident. Appleman said VA Administrator Harry N. Walters decided several hours before the confrontation that he wanted the team to return to headquarters so that he could see its presentation.

The team will go back on tour in late June, Appleman said, after the presentation gets some fine tuning.

MORE DIOXIN CLUES . . . Meanwhile, scientists at the University of Wisconsin have discovered that high doses of dioxin can reduce the sex hormones produced by male rats and cause their reproductive glands to shrink.

The experiments, which were financed by the National Institutes of Health, are believed to be the first to link dioxin to reductions in the male sex hormones testosterone and dihydrotestosterone.

Decreases in the those hormones can lead to a loss of sex drive, sexual dsyfunction and impotence.

Those health problems are among the effects that Vietnam veterans claim they have suffered because of exposure to Agent Orange. However, the scientists warned against extrapolating their test results to humans because the rats were exposed to much higher doses of dioxin than any humans are believed to have experienced. Scientists also do not know whether rats react to dioxin the same way humans do.

A permanent loss of the sex hormones would cause men to develop feminine characteristics. Since few Vietnam veterans have reported such problems, scientists doubt that any of them suffered permanent hormonal damage.

The test results, however, could explain why several men reported a temporary loss of sex drive after they were exposed to high amounts of dioxin during industrial accidents.

KEEPING STOCK IN THE VA . . . Dr. Donald L. Custis, the VA's chief medical director, owns stock in two medical companies that have large contracts with the agency, according to the annual disclosure statements that top government employes must file. As head of the agency's Department of Medicine and Surgery, Custis oversees its 134 medical centers.

Custis owns $5,000 to $15,000 worth of stock in Abbott Laboratories, which was awarded $5 million in VA contracts in January, and between $1,000 to $5,000 of stock in Warner-Lambert Co. Inc., whose Parke Davis subsidiary recently received nearly $6 million in VA contracts.

The VA contracts were made through normal, government bidding procedures independent of Custis' office and therefore his stock holdings are not a conflict of interest, ethics officers said.

WHAT KIND OF SHOW? . . . Because of budget cuts, the United Service Organizations have decided to stop supplying entertainers for free performances at VA medical centers. That has forced the VA's Office of Voluntary Services to begin recruiting them. Last month, it advertised in the Commerce Business Daily for groups willing to tour the nation at their own expense to perform for patients at 172 medical facilities.

While the VA has not been overwhelmed with responses, its ad did manage to raise a few eyebrows. The request was printed in the "miscellaneous" column, which uses the letter "X" as an identifying code. As a result the listing read: "X-Live Entertainment," leading a casual reader to wonder if the agency had decided to spice up its shows.