The Washington Bullets lost their third exhibition game in four outings tonight when the Cleveland Cavaliers blew past them, 121-106.

The Bullets took a quick 4-1 lead, but then succumbed to 72 percent Cleveland shooting in the first quarter and were down by nine points by the time the period ended.

The Cavaliers increased their lead to 63-51 at the half, and the Bullets never made a serious threat after that.

Greg Ballard, who has started at big forward for the sore-hipped Elvin Hayes the last three games, led the Bullets with 29 points. Free agent guard Gus Bailey, who is fighting for a spot on the final 11-man roster, scored 21, Dave Corzine added 20.

The Cavaliers were led by newly acquired Randy Smith, who bombed in eight of nine shots from the field and scored 18 points. Bill Willoughby had 16 and Jim Chones scored 15.

Hayes was not with the team and Kevin Grevey, who had played the previous two nights, sat out the game with a sore hamstring.

The Bullets have four more pre-season games before opening the regular season Oct. 12 at Capital Centre against the Philadelphia 76ers.

The next exhibition game is Wednesday night at 8 against the New York Knicks at James Madison University in Harrisonburg, Va.