In their first assault against one of President Reagan's judicial nominees on purely ideological grounds, Senate Democrats questioned yesterday whether Daniel A. Manion has such extreme views that he should not sit on the federal bench.

Among other things, the Democrats castigated Manion, a former Indiana state senator, for sponsoring a bill to allow the Ten Commandments to be posted in Indiana public schools two months after the Supreme Court ruled that such postings were unconstitutional.

In an unusual second hearing before the Senate Judiciary Committee, Manion responded cautiously to questions about controversial statements he has made, saying he could not recall them or has since changed his mind. Most of the panel's Republican senators, however, expressed support for Manion's nomination to a seat on the 7th Circuit Court of Appeals in Chicago.

Sen. Paul Simon (D-Ill.) said the American Bar Association rated Manion "qualified," its lowest positive ranking, with a minority calling him "not qualified." Simon said this was part of "a disturbing pattern" in Reagan's second term, in which half the appeals court nominees have received the ABA's lowest passing grade.

Manion is also opposed by the Chicago Council of Lawyers and People for the American Way, a liberal lobbying group that criticized his "extremist views of the Constitution, including indifference to free speech [and] hostility to the separation of church and state."

In attacking other judicial nominees, the Democrats have skirted questions of conservative philosophy and focused on such issues as temperament and personal conduct. In opposing Jefferson Beauregard Sessions III for a district judgeship in Alabama, for example, they seized on testimony that Sessions has made racially insensitive remarks. Sessions is to testify before the panel again next week.

Yesterday's hearing had a different focus as Sens. Simon, Howard M. Metzenbaum (D-Ohio), Edward M. Kennedy (D-Mass.) and Joseph R. Biden Jr. (D-Del.) questioned whether Manion would abide by Supreme Court rulings. "I am bound by the Supreme Court decisions," Manion said. "I might criticize it, but I would follow it."

Metzenbaum asked why Manion had cosponsored a bill to allow the teaching of creationism along with evolution in Indiana public schools. He also criticized Manion's 1981 cosponsorship of the Ten Commandments measure after the Supreme Court had ruled that the commandments could not be displayed in public schools.

"It would have been a very educational and beneficial thing to post in the schools," Manion said. " . . . It was kind of a protest of that Supreme Court decision."

"It troubles me that you believe a Supreme Court decision can be challenged by a state statute," Kennedy said.

Simon questioned a 1979 letter from Manion to a John Birch Society chapter which said that "your members are certainly the people who are on the front line of the fight for constitutional freedom." Manion declined to say whether he approved of the group.

Much of the questioning concerned Manion's statements on a 1970s radio and television show hosted by Manion and his father. When asked why, on a 1977 show, he had called a controversial book by the late Georgia congressman and John Birch Society spokesman Larry McDonald "one of the finest summaries of the history of our country," Manion said he was not sure whether he had read the book.

On two 1971 broadcasts, Manion urged Congress to strip the Supreme Court of some of its jurisdiction, saying this would "put the Supreme Court back where it belongs in the Constitution." On one 1971 broadcast, Manion said that antiwar demonstrators "should be penned up . . . . Why are all these people, some who are even convicted criminals, going around the country and . . . advocating communism, why are they allowed to run free?"