The burly National Guardsman in camouflage fatigues and combat boots stood in the rubble of the crumbled mountain, amid boulders, twisted palm trees, broken slabs of bathroom tile and mattresses piled helter-skelter.

Here lay a pink lace shawl. There lay an empty record jacket entitled "Let's Dance the Merengue." Everywhere was the smell of rotting flesh in the burning heat of midday.

The guardsman, Luis Sierra, began to cry. "You feel the death," he said. "Yesterday, I found a mother with a child in her arms. It was a 2-year-old girl. I have a 2-year-old girl, too. I don't know how to handle this. But something in my heart tells me I need to be here."

At an agonizingly slow pace, rescue workers today continued to dig bodies out of the crushed houses of what had been the poor, but vibrant, shantytown of Mameyes. At least 250 homes were buried under a mudslide as their inhabitants slept early Monday.

Three days of torrential rain also caused widespread flooding across the island. Authorities have identified 87 dead, including 30 at Mameyes.

Under the hillside rubble, hundreds more are believed entombed. "It is devastated," said Frank Petrone, regional director of the Federal Emergency Management Agency as he surveyed the giant gash in the mountainside from a safe distance.

"We suspect the death toll could climb to 500 with the amount of mud that slid. Bodies are 100 feet deep," he said.

"We don't expect to find any more survivors. This was a massive avalanche. If there were air pockets beneath the collapsed houses, they quickly filled with water and mud, causing immediate suffocation," he added.

President Reagan today declared the flood-stricken cities of Coamo, Ponce, Santa Isabel and Toa Baja as major disaster areas, making them eligible for federal relief funds.

A numbing sense of horror grew throughout industrial Ponce as rumors spread this morning that authorities, fearful that decomposing bodies might set off an epidemic, would abandon the search and seal the area over, leaving a mass grave.

But Gov. Rafael Hernandez Colon told reporters this afternoon that health officials had determined "no immediate danger to the health of the inhabitants of the disaster area. Therefore, we are proceeding with our search for the bodies and for possible survivors.

"We will continue to search as long as it is humanly possible . . . , " he said.

Daniel Velez, the governor's press secretary, said in an interview that officials would consider the possibility of a commmon grave if circumstances change. "It depends on whether it rains more and on what the engineers say," he noted.

Rain is forecast for this weekend.

A U.S. Army Corps of Engineers team from Vicksburg, Miss., is examining the stability of the steep slope where other homes tilted precariously toward the deathly ravine.

Velez said a mass grave would "become a political issue." Relatives of those buried said today that they would use picks and shovels, whether or not the area was sealed, in attempts to find bodies of their loved ones for burial.

Since the narrow valley, now piled with boulders and debris, made use of heavy equipment impractical, five rescue teams of a dozen workers each tore at the rubble with sledgehammers, shovels and pickaxes, removing obstacles by hand.

Only four bodies were found Wednesday under the now dry and solidly packed mud. Today, by late afternoon, only two more had been recovered.

Halfway up the slope, volunteers found a bottle of cologne in the rubble, dabbed it on their surgical masks with and, to stave off the stench further, sprinkled it over a small patch of earth they were excavating. After an hour, they uncovered a knee and a leg, but it took two more hours to extract the body of a 55-year-old man.

Searching for his wife, they threw more cement blocks and strips of corrugated tin roof down the slope. They probed the earth with steel rods, at one point uncovering a child's lone green flip-flop sandal.

Nearby, a Bible lay on the ground, its covers torn off, its pages open to the book of Nehemiah, the prophet who rebuilt the walls of Jerusalem. A dusty postcard depicting the Brooklyn watefront stuck out of the mud.

The site had been identified that morning by teams of dogs and rangers from the Shenandoah National Park.

Throughout the night, Army experts with electronic sensors walked through the site listening for the slightest tapping noise that might indicate a survivor. Once they thought they had one, but it turned out to be water dripping from a broken pipe.

His eyes welling with tears, Eliezer Pacheco, 25, stood near his cousin's crushed house, holding mud-spattered photographs that another volunteer had just found.

"This is my cousin, Magali, and this is her husband, Junior Rodriguez," he said, showing snapshots of two smiling youths. "They are under there," he added, gesturing toward a tangle of collapsed cement block walls and kitchen appliances.

He showed another photo of the whole family, including the grandmother, Amada Rodriguez, and her grandchildren. The 2-year-old, Jessica, drowned, he said. Amada tried to carry her out but dropped her by mistake while trying to pull her 6-year-old grandson from under a collapsed wall. Jessica fell in the rushing water and drowned.

Pacheco said he cannot understand why more workers and equipment cannot be brought in. But National Guard Col. Luis Manuel Carillo said more workers would cause confusion. "We cannot dig in a rush," he said.

At a Head Start center at the edge of the mudslide, the drawings of 5-year-olds, made last Friday, are displayed on the wall.

Samuel Serrano's drawing shows two primitive figures of children on their side buried under what looks like rocks and sticks. Gonzalez Hobrion's drawing shows lightning and boulders.

"Both children are dead," said Virginia Valesquez, a teacher. Other drawings show garbage, rats and a large crevice in the open mountain.

"We plan to take these pictures to psychologists," she said. "These children had a feeling something was going to happen."