In a last, desperate move before the deadline, the misdirected, thoroughly confused, archaic-thinking front office of the New York Knicks is trying to sign Paul Westphal.

Last summer, Coach Red Holzman insisted on dumping Ray Williams and replacing the talented young guard with aging veterans Mike Newlin and Randy Smith. For whatever reason--and you can get a different one at every subway stop in New York--both have failed. Now, with the Knicks in serious danger of missing the playoffs, Gulf and Western is being asked to dig into its vast resources once again.

"We're very close," Eddie Donovan, the general manager of the Knicks, said yesterday when asked about the negotiations for Westphal, 31, who has played only 36 games in two seasons because of foot injuries and contract problems.

Before the Knicks commit the $150,000 they are offering Westphal for the rest of the season, they will give him a thorough physical examination. Then they could sign him to an offer sheet and Seattle would have 15 days to either match it or strike a deal. New York must sign him before March 1 or Westphal will be ineligible for the playoffs.

Sam Schulman, owner of the Sonics, still remembers how the Knicks snatched Marvin Webster from Seattle's 1978 Western Conference championship team, and that certainly won't make things easy.

Howard Slusher, Westphal's unpredictable agent, said yesterday that he's issuing no statements. His demands reportedly are that if the Knicks merely sign Westphal for the remainder of the season, they give up the right of first refusal when he becomes a free agent again.

Among the Knicks' chief rivals for a playoff spot are the Bullets, who decided recently that the often-injured Westphal isn't worth the risk. Bob Ferry, the general manager of the Bullets, can only hope now that the five-time all-star doesn't make the difference in the Bullets' playoff drive against New York.