Lobbyists started lining up yesterday outside Room 1100 of the Longworth House Office Building at 7 a.m., three hours before the Ways and Means Committee hearing began, like teen-agers waiting for a Madonna concert. The line eventually reached 130 yards down the corridor and around the bend.

"It's the proverbial $1,200 suit crowd," said Rep. Andrew Jacobs Jr. (D-Ind.). "I see the AMA lurking. The oil people are lurking. I see the bond people lurking."

Many of the very top, most expensive lobbyists stayed away, perhaps watching the proceedings on C-SPAN television. It was more a day for junior partners and trade association representatives. Scores of them formed a standing-room-only crowd in the cavernous hearing room.

Lobbyists for real estate, heavy machinery, state and local governments and almost every other big special interest in America were there.

The big draw was President Reagan's tax-simplification proposal.

Everyone was worried about whose ox would be gored, and curious about Washington's newest "populist," Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.). Big dollars and big reputations were at stake.

Geoffrey G. Peterson, government relations director of the Distilled Spirits Council, was looking after the three-martini lunch, among other things.

"It's a very easy issue to demagogue against," Peterson said. "But we think it's a legitimate way of doing business, a good marketing tool that shouldn't be discriminated against."

Peterson sported the hottest button on Capitol Hill on his suit jacket. It said, "Write Rosty," printed in honor of Rostenkowski, who urged voters to "write Rosty" during a network television appearance Wednesday night. The idea was that not many could spell his name.

The TV appearance made Rostenkowski, the old machine Democrat from Chicago, a reborn political property, a hot item after 27 years in Congress.

Rostenkowski, whose dreams of someday becoming House speaker had all but disappeared before his television address, basked in the attention.

When Rep. Guy Vander Jagt (R-Mich.) called the address "a fine speech" and suggested it be put in the official report of the hearing, the gruff-talking Chicago Democrat grinned from ear to ear for two minutes.

When the committee's star witness, Treasury Secretary James A. Baker III, arrived, Rostenkowski pinned a "Write Rosty" button on his lapel and called Reagan's tax proposal a "crusade."

"He struck a populist chord," the chairman said of the president. "The test is whether he can turn public anger and frustration against those bent on protecting the status quo."

It was, indeed, a sight to see, the Democratic chairman embracing the rhetoric of the Republican president, all in the name of tax reform.

The hearing itself was almost anticlimatic. The Princeton-educated Baker, sporting a new tan, was smooth and unflappable. Committee members spoke in strained metaphors.

Rep. J.J. (Jake) Pickle (D-Tex.) welcomed Baker "to the bull ring of tax reform," but warned against "wooing the fair maiden of tax reform" while allowing "the house to fall down" with big deficits. Later, he added, "it takes two to tango."

Rep. Bill Archer (R-Tex.) accused the Reagan administration of toying with false advertising by calling its plan one of tax simplification.

"As a youngster growing up in Houston," he told fellow Texan Baker, "we learned if you're going to give your best girl roses you better give her real roses because she can tell the difference between roses and daisies."

Rep. Brian J. Donnelly (D-Mass.) used cold weather as a defense for including state and local taxes as deductible items in tax law. He said snow removal and heating costs make government more expensive in the North, making them high-tax states.

"We're not running little socialistic republics up there," he said. "You go to Boston in the winter and it's cold."

After four hours of this, Rostenkowski ended the hearing by telling Baker: "You've given the ball to us, but I don't want you to think you're out of the game."

Baker said he would come back to play another day.