In the placid, wooded hills of New Hampshire, an election for the Dartmouth College board of trustees became the setting for a fierce ideological battle involving an Indian, a South African shantytown, an Education Department official and an off-campus student newspaper that derides blacks, homosexuals, feminists and nuclear-freeze supporters.

The battle ended last week when, according to the school's official tally, just over half of the school's 44,000 eligible alumni voted to return two trustees to the board, rejecting the candidacies of two conservative dissidents, including a California-based political cartoonist.

Trustee Robert E. Field, a retiree temporarily serving as acting treasurer of the college, defeated Stephen G. Kelley, syndicated cartoonist for the San Diego Union, by 13,088 votes to 9,020. Trustee Ronald B. Schram, a Boston lawyer, defeated challenger Daniel E. Provost III, a retired public affairs officer, 12,727 to 9,403.

It was the most expensive and highly visible campaign in Dartmouth's short history of electing trustees. The conservative losers spent about $55,000, according to one of their key campaign backers, and the winners guessed they spent almost as much.

What was at stake in the contest depends on who is asked.

For the incumbents, the college administration and the school's official alumni committee, the contest was an attempt by a small clique of conservatives -- backed by college outsiders -- to turn the clock back on the Ivy League school's modernizing reforms of the past two decades. These would include changes that allowed women to attend Dartmouth and affirmative action policies to increase the number of minority students and minority faculty members. "There is a group -- a fairly vocal group -- that regrets the many changes," Field said. "They feel the college has become too liberal, that it has pandered too much to minorities.

"I don't consider this a victory," he added. "I think this is in many ways an unfortunate and kind of sad episode in a family's life."

But to the challengers, the election was "a battle for the soul of Dartmouth College," as termed by Deborah Stone, editor of the Dartmouth Review, the student-run off-campus publication that has been involved in such antics as surrepetitiously taping and publishing the transcript of a Gay Students Association meeting.

Review staffers, and their alumni supporters, see Dartmouth as the captive of liberal special interests. This group contends that the trustees need to take a firmer hand in forging a "back-to-basics" path for Dartmouth.

"The place is out of control," said S. Avery Raube, a 1930 graduate, now retired, who coordinates conservative politics as head of the Alumni Committee for a Strong Dartmouth. "There's no administrative control over anything or anybody," he said, adding that Dartmouth is "on the road to anarchy."

For years, the rallying cry of this small but growing conservative faction has been the Dartmouth Indian, the school's unofficial mascot whose war-painted face was banished from the campus in the 1970s, when it was deemed offensive to Native Americans. The removal of the Indian symbol, to some conservatives, underscored the college's tilt towards radicalism and shifting away from traditional values.

The most recent galvanizing issue for the right came on the evening of the Rev. Martin Luther King Jr.'s birthday this year, when a group of students wielding sledgehammers -- most of them Review staffers -- partially destroyed a mock shantytown that was set up on campus to protest the school's investments in South Africa.

The Review and its backers -- many of them well-connected in the Reagan administration and various conservative think tanks -- felt the school handed out harsher punishment to the attackers than it gave the liberal students who set up the shantytown in the first place.

The often nasty election campaign, waged with code words and innuendo, took a curious turn when Laura A. Ingraham, an assistant to Education Department Undersecretary Gary Bauer, dashed off an angry letter to a Washington law firm protesting one firm member's support of the two incumbents.

Attorney Berl Bernhard had formed an "Alumni For Dartmouth" group to counter the conservatives and help reelect the incumbents. He had sent out a letter warning alumni to vote for Field and Schram against the Raube group's two candidates.

Ingraham then wrote the managing partners of the Bernhard's firm, asking them if they knew of Bernhard's efforts and warning them, "I will be investigating the circumstances surrounding Mr. Bernhard's very serious allegations." She signed it, with her title "confidential assistant to the undersecretary," and gave her return address as the Education Department, 400 Maryland Ave. SW.

Ingraham's letter prompted an angry retort from one of the firm's senior partners, asking whether he was being threatened and wondering why a public official would use their title to attack a private citizen. Bauer, the undersecretary, called the lawyer personally to apologize and a department spokesman said the assistant was reprimanded.

Ingraham's letter, which some conservatives descibed as an overzealous reaction from a dedicated alumna, is representative of the deep-seated passions that Dartmouth graduates bring to the school's often-zany politics long after they depart the college of Daniel Webster and Robert Frost.

"The Dartmouth alumni have a legendary commitment to their college," opined college President David T. McLaughlin, himself a favorite target of conservative ire. "Their interest is reflected in the size of the vote and is an expression of confidence in two fine trustees who have served their alma mater effectively."

The intense emotions "come out of a common love for the place," said winner Field. "The people who are challenging love Dartmouth just as much as we all do. We just have different perceptions of what Dartmouth is and what it ought to be." Added Raube, "Dartmouth is a disease. It gets into you. It's like a bulldog -- it hangs on."