The gray skies hanging over this picturesque town for the past three days are somehow symbolic -- these are dark days for Penn State and its Renaissance man in coach's clothing, Joe Paterno.

It is not only the 1-2 record, the second loss a humilitating 42-17 defeat by Nebraska Saturday. It is not only the fact that there will again be no national championship this season or that the team has dropped out of the top 20 for the first time in many years.

It goes beyond that. "It's a matter of image," said Robert J. Scannell, dean of the College of Health, Physical Education and Recreation. "Because of the exposure we've had the last few years, a lot of people have come to think that Penn State football players never lose games and always make straight As.

We love that image. But it creates added pressure. What used to be a local story is now a national story."

Part of that national story concerns three athletes who not only didn't make As but didn't make enough Cs to stay eligible. One was All-America safety Pete Harris, brother of the Steelers' Franco Harris and the nation's leading interceptor a year ago. The other two were Karl McCoy, a starting defensive halfback, and Frank Case, the starting nose guard.

But that is not all that has gone wrong here this year. Since New Year's Day, when the Lions lost the Sugar Bowl and the national championship to Alabama, 14-7, there has been one problem after another. They include:

The suspension of starting offensive tackle Bill Dugan. The winner in spring drills of the Red Worrell Award given to the offensive player who shows "exemplary conduct, loyalty, interest, attitude and improvement," Dugan was allegedly found sitting on a bench drinking by campus police two weeks ago. That is against university rules. Dugan is still on the team but not playing.

The Matt Millen half-mile incident. Millen, one of two All-America defensive tackles and, along with the other, Bruce Clark, the bulwark of the Lion defense, stopped running during the second of two required half-mile runs in a preseason workout. Paterno stripped him of his cocaptaincy. Millen says he just doesn't like running distances -- he completed the drill three days later. Others say he isn't as enthused about football as he once was.

The departure of Brian Kissler. A senior safety expected to help in the absence of Harris, Kissler decided to give up football in a preseason after suffering a shoulder injury last year.

Injuries. Grover Edwards, Harris' initial replacement, was in an auto accident in July.He is playing with a neck brace. Jim Brown, another starting offensive tackle, broke his leg in spring drills and has not returned. Tom Wise, McCoy's replacement, also missed a game with an injury. Paterno has been forced to convert linebacker Guiseppe Harris -- Pete and Franco's brother -- from linebacker to safety and has made Joel Coles, a third-team tailback last year, a cornerback.

"When all these things happened, we all looked around and said 'We can win anyway,'" said Dayle Tate, the starting quarterback, a 1976 Robert E. Lee High School (Springfield, Va.) graduate. "Now we're all sort of looking around and thinking that all these things did have an effect on us."

This did not figure to be a great team to begin with. Eight of 11 offensive starters were gone, including All-America quarterback Chuck Fusina. When the secondary was decimated, the Lions were in trouble.

"It's hard to play in the line and stop one play after another and then watch it all go down on a long pass," said Clark."The guys who were back there had confidence that they were going to get the intercept. The new guys have the talent, but they don't have the confidence yet. They have to come together."

Suddenly, Penn State Layers are using all the cliches generally associated with losers: "Come together," "jell," "get our heads straight," "bear down." And they admit that the aura of near-invincibility that a team acquires after going 22-2 over two seasons has been stripped from them.

"If I'm on another team, I have to be thinking now that this is the year to get Penn State," said starting wingback Mike Guman. "Step on them while they're down. If I were Maryland this week I'd be saying to myself, 'They embarrassed us (27-3) last year. Let's kick some dirt in their faces this time.' That just makes it tougher for us."

Guman is the quintessential Paterno player. Bright and engaging, is an honors student with a major in marketing. When Scannell talks about the type of player Penn State wants, he talks about "recruiting the Mike Gumans."

Guman sees the problems of 1979 as perhaps a byproduct of the successes of 1977 and '78.

"Sometimes when you're winning, people get lax about things; they stop bearing down," he said. "I think a lot of guys around here started thinking that everything is served up on a silver platter because they played football.

"They forgot that we're here for more than football."

Paterno has built his reputation not only by winning (123-25-1 in 13 years at PSU) but by doing things differently than the Brants, McKays and Parseghians. There is no athletic dorm at Penn State. More than 90 percent of the players graduate, most of them in four years. If a player has a Saturday class, he goes to it. It is "the Penn State Way."

"Joe is cracking down now," Clark said approvingly. "He did that my freshman year when we went 7-5. He decided things had gotten too lax and he got after people. Our practices the last two weeks have been extremely intense. We need that. We need to be punished sometimes."

In spite of his reputation as a "liberal" coach, some say that Paterno, now 50, has become conservative the past few years. Always a media favorite, he does not talk to reporters from Sunday through Tuesday because he is "too busy." Practices, never open to the public, are now completely closed and there are numerous signs around the practice field warning the curious to stay away.

Nevertheless, Scannell insists that the new-found academic problems and the two losses aren't going to change Paterno or the principles his program is built around.

"One thing we have to do is keep all this in perspective," Scannell said. "Just because of a couple of Problems or a couple of losses, even if we have a bad season doesn't mean we have to panic," he said. "These problems will iron out. We don't want to create a major for athletes to slide throught on or go to an athletic dorm.

"We got to where we are by doing things one way. We don't want to get away from them because of one bad streak."

The players insist the bad streak -- at least the one on the field -- will end Saturday in College Park, Md. Penn State is 23-1 against Maryland and Paterno is 12-0.

"We all feel like our backs are against the wall now." said tailback Booker Moore. "We have eight games left and we have to win them all if we want to got to a decent bowl. We're not used to losing around here. Our pride is at stake. Everyone is shook up by this. Nebraska was embarrassing and we don't want anything like it to happen again."

Guman adds: "Sure, we've had some problems but we should never lose the way we did to anybody, no matter how good they are."

Paterno has started 1-2 before -- as recently as 1976, in fact -- and always come back strong. Many think the same will happen with this team, especially since the schedule eases after the Maryland game. As a result, "9-2" is an oft-heard phrase around here this week.

"I wish everybody would quit talking about bowls and national titles and rankings for a while," siad Tate. "I just want to go out and win one game. There's no sense talking about what could happen if we lose. I just want to win this week."

Tate is one of many starters still struggling to "find himself." He faced a tough baptism in the losses to Texas A&M and Nebraska and some think Paterno may play sophomore Terry Rakowsky extensively Saturday. Tate admits he has lost a good deal of sleep recently.

"Before the season, I didn't think the pressure of being 'Penn State's quarterback' would bother me," he said. "But the losing really got to me. I find myself putting all the blame on myself even though I know it isn't all me. I don't like losing at all. No one up here does."

Tate, who was married in July, is a born-again Christian who wants to be an evangelist when he graduates. He thinks his current experience will help at that vocation. "I can tell people about the fears, troubles and pressures one lives with as the quarterback at Penn State. And I can tell them what it's like to lose when you're not supposed to."

Many people on campus point to the Sugar Bowl loss as the start of the current problems because the team was so certain it would win.

And, when the Lions returned home, the team had its worst term -- as a group -- academically since Paterno has been head coach.

"That might have happened even if we had won the game," Scannell pointed out. "They didn't study because they were disappointed, but if we had won they might not have studied because of the euphoria.

"I think the problem was that the interest-level and the hoopla-level got so high we couldn't control it. Our problem is that people expect so much of us now that when the pendulum swings into a down-cycle, like it has now, people can't understand it. They say, 'What's wrong?' Nothing's really wrong. The pendulum has just swung downward for the moment."