Eight years ago, a long-sought federal strip-mining bill became law. Today almost no one is satisfied with the results. Not the environmentalists, who pushed for the controls. Not the coal industry, which opposed them. Not the politicians, who voted for them.

Most of all not Sidney Cornett, a retired Army major, who lives on Combs Branch here.

"The mountaintops are changing," he said as he stood on a hillside above his home. "Every time I come up here, things look worse."

Into the distance, ridge after ridge bore the marks of strip miners' bulldozers. Some were ringed with deep, 15-year-old scars; other mountaintops looked as if they had been decapitated. Here and there, new trees and grass grew on slopes refashioned by strip miners after the coal had been mined, examples of the kind of reclamation envisioned in the law.

But the patches of green were far outnumbered by new, unreclaimed pockmarks on the hillsides, spilling ugly piles of rubble down the slopes.

"I think the whole reclamation program is a farce," said Cornett, 49, who fought a three-year battle to keep a coal company from strip mining his property under a "broad form" deed, in which his grandfather sold the mineral rights on the family land a half century ago.

He lost. His land, once heavily wooded with poplar and beech trees, looks like a moonscape, ugly and barren.

Thousands of acres on Appalachian mountainsides have suffered a similar fate the last eight years, the result of lax enforcement, bureaucratic bungling and outright lawlessness by segments of the coal industry.

Hundreds of coal companies have ignored federal orders to repair damage to land and water. Scores more have found ways to circumvent the law.

Federal officials have told Congress that 6,000 unreclaimed strip mines have sprung up since 1978. Some environmentalists say the number may be twice that.

In places like eastern Kentucky and southwestern Virginia, the abuses have become so widespread that they overshadow progress in reclamation practices by many companies and raise serious questions about the law's effectiveness.

"Everywhere I look I see problems, and the most troubling thing I see is that the problems are getting worse, not better," said Rep. Morris K. Udall (D-Ariz.), an author of the law. "Reports of abuses of both the letter and spirit of the act grow almost geometrically. The entire strip-mine program, in my view, is in trouble."

The Interior Department's Office of Surface Mining, set up to oversee the law, is beset by allegations of mismanagement, inefficiency and waste. During the last year, it has been investigated by two House committees, the Internal Revenue Service and the General Accounting Office. It also has undergone four shifts in top management.

A report by the House Government Operations Committee a year ago charged that OSM had failed to collect $152 million in back fines (the amount has since risen to $200 million), spent $1.5 million on computers that do not work and encouraged violations of the law by failing to establish itself as "a credible regulatory agency."

OSM has collected $1 of every $10 it has assessed in fines, the report said. "Inordinate delays, and in some cases complete breakdowns . . . have delayed cases so long that there is little hope of collecting most of the $150 million in penalties owed by coal operators."

Under the law's enforcement scheme, OSM policed the coal fields until the 24 coal states rewrote laws to conform with national standards. As states took over, OSM retained an oversight role, an arrangement one Interior Department official described as "difficult at best."

State enforcement has been uneven, and in Tennessee and Oklahoma, OSM has resumed control. A recent OSM review of enforcement in Kentucky found that state inspectors cited only one violation in 14, were "inconsistent" in levying fines and had not developed an effective way to deal with repeat offenders.

"Enforcement has broken down. Responsible companies are looking like fools for spending the money it takes to do a good job of reclamation," said Thomas J. FitzGerald, a Frankfort, Ky., attorney who represents environmental groups. "There's no incentive built into the system to do a good job."

Industry spokesmen say a growing number of "wildcat" operators ignore the law, sometimes strip mining land they do not own.

"They're a new breed. They have no regard for the law or anyone. It got so bad for a while I thought we had the Mafia in here," said Richard Corbett, longtime land agent for BethEnergy Mines Inc., a subsidiary of Bethlehem Steel Corp., in Jenkins, Ky. "They don't pay severance tax. They don't pay income tax. They don't reclaim the land. They don't pay for their coal. A legitimate company can't compete with them."

Corbett said he and other land agents repeatedly have been threatened with death by wildcatters illegally mining BethEnergy land.

"I'll face a man down with a gun, but when they call you at home that's something else," he said. "One of them knew all about my boy. Where he went to school. When he came home. He said if I wanted to see that boy stay alive I better back off.

"You get gun-shy after a while," he added. "We're not getting combat pay."

Corbett estimated that 30 such wildcatters operate in his area, often working nights or weekends to avoid detection. "They come in, load up 3,000 to 4,000 tons of coal over the weekend and disappear," he said. "At $30 a ton, that's a pretty lucrative business."

Legitimate operators who evade the law have been a far greater problem than wildcatters. Records indicated that scores of coal companies, including subsidiaries of some of the nation's largest corporations, have exploited its exemptions.

Some firms have claimed that they were exploring for coal, not mining it. A spot check of 2,800 "exploration" sites in Kentucky by OSM found that one-third were strip mines.

Still other coal mine operators, perhaps as many as 1,500, according to environmentalists' estimates, have forfeited bonds required to guarantee that reclamation takes place and abandoned sites because it is cheaper to forfeit the bond than carry out the required reclamation.

The most frequently exploited loophole has been an exemption designed to allow "pick-and-shovel," mom-and-pop operators to strip mine 2-acre tracts of their land.

An estimated 2,700 2-acre sites in Kentucky and Virginia have been strip mined and abandoned with little reclamation under the exemption. Many now look like areas strip mined before the law was enacted. They have large exposed cliffs or "highwalls" prohibited on larger sites, poor drainage control, little vegetation and piles of rubble slipping down the hillsides.

"The 2-acre thing has gotten completely out of hand. It's a black eye on the whole industry," complained Victor Childers, president of Coal Operators & Associates, an industry association in Pikeville, Ky. "We all, in effect, are paying for their sins. It gives the whole industry a bad name."

Of 944 such permits granted in Kentucky during 1984, 70 percent violated state or federal law, according to a new OSM report.

Some firms have put together a series of 2-acre permits in a "string of pearls" to allow them to strip mine large areas, according to L. Thomas Galloway, a Washington attorney who has represented environmentalists in a series of successful suits against OSM. Others have created "shell companies" to take out permits on adjoining pieces of land, he said; the seperate companies share equipment, employes, officers and stockholders.

James Garrison, president of the Hardly Able Coal Co., said many companies have been forced to circumvent regulations, which he claims are overly stringent. It is a matter of economic survival, he said.

"In my heart I don't want to break the law. We're not raised like that in this part of the country," he said in an interview in his Manchester, Ky., office. "But if you're in the coal business, you inherit a system that makes you. It's almost like you are breaking the law before you get out of bed in the morning.

"Yes, we were playing with the earth. But we've been putting the mountains back together," he said. "We love the environment as much as anyone. Our forefathers came to this land 150 years ago, and we want to protect it."

Hardly Able was charged with violations at two strip mines in 1978 and ordered to cease operations. When the violations were not corrected, the company was assessed $814,600 in fines.

Yet, according to OSM reports, it continued to obtain dozens of permits through a series of related companies with colorful names like Sugar Creek Coal, Little Goose Coal, Rooster Branch Coal and G.R. & Co. All were controlled by members of Garrison's family, the reports said, and all used the same equipment to work the mines.

"What would you do? Go broke and tell the people who you owe $1 million that you're sorry?" Garrison asked. "You know what you'd do. You'd keep working any way you could. That's what we did."

OSM has gone to court in an attempt to make Hardly Able pay back fines. The company, Garrison alleged, has been singled out because "we aren't big enough to have enough political clout."

"We just can't understand the intent of the federal strip-mining law," Garrison added. "All the law did was take the coal business from people like my family and put it in the hands of a few big corporations."

"There's a reason we don't pick on the big companies," said W.H. Tipton, head of OSM's Kentucky office. "They Hardly Able do business in a different manner than the big companies. The big companies do a higher level of reclamation."

The strip-mine law has been embroiled in controversy from the start. The product of years of bitter congressional struggle, the measure was vetoed twice by President Gerald R. Ford before President Jimmy Carter signed it, saying he wished it were tougher.

"The act was never fully accepted by the industry," attorney Galloway said. "The legislative process did not result in any consensus, so the years of controversy that preceded the law continued after it was passed."

The battleground shifted to OSM, which has been buffeted by lawsuits, investigations, personnel shifts and policy changes.

"The regulations were changing every time you changed the calendar," said Tom Duncan, president of the Kentucky Coal Association.

"Some of us felt like a frog riding a yo-yo," one coal operator said.

The coal industry considered Carter's OSM appointees "zealots," bent on regulatory excess. When Carter was swept out of office, President Reagan's first Interior secretary, James G. Watt, branded the agency a "bureaucractic nightmare . . . more designed to obstruct coal production than to further the cause of reclamation."

Watt vowed to change it.

Hundreds of pages of regulations were rewritten; 470 of OSM's 948 employes resigned, retired or were fired within six months; five regional offices were closed.

Now, four years later, all the policymakers who came in with Watt are gone from OSM, and many regulations are being rewritten a third time. Acting OSM director Jed B. Christensen became the fourth head of the agency in 13 months when he succeeded John D. Ward, who resigned last month.

Christiansen and other Interior Department officials agreed to be interviewed for this report only on a background basis.

"Certainly we have problems. We're very open to admit we have problems, but to say everything is in shambles is an overstatement," one top official said. "Any organization will flounder to a degree with a lack of permanent leadership. But I think you'll see things tightening now with Jed and his new management team.