It was going to be such a sweet storybook tale.

A horse who had cost a paltry $13,500, who was the son of an obscure stallion on an obscure farm in Washington state, was going to win the Kentucky Derby.

Two hard-working brothers, whose only recreation came from buying one or two cheap horses a year, were going to outdo all the rich society staples and win the big one.

A trainer who had been banished from the sport for two years was going to come back from that disgrace in the biggest way possible.

But dreams in the horse-racing business are as fragile as the animals they are pinned on. For the best 3-year-old thoroughbred in America, Timely Writer, and for his owners, Francis and Peter Martin, and trainer Dominic Imprescia, all those dreams came crashing down Tuesday.

Imprescia had spent all day Monday around his barn at Churchill Downs, for no particular reason except that trainers with their first legitimate Derby horse are as habitually watchful and anxious as parents with their first-born child. He observed that Timely Writer wasn't eating properly--a sign that horsemen universally interpret to mean that something is amiss--and so he kept watching nervously.

Tuesday morning, Timely Writer was perceptibly ill, and his veterinarian suggested that he be vanned to an animal hospital here. When the doctors examined him, they feared that a tumor or some other obstruction was blocking Timely Writer's intestines.

"We've got to open him up," Dr. Paul Thorpe told Imprescia.

"Do what you've got to do," the trainer said, and he knew that his Derby dreams were over.

What the vets found in an hour of surgery was a condition less serious than they had feared. Timely Writer was suffering from gastroenteritis, a buildup of gas and pressure that was causing his stomach to swell and block the intestine. Today, Thorpe said, "The horse is doing extremely well. I feel he will be medically normal in three weeks or a month."

By getting sick at the worst possible stage of his career, Timely Writer became the fifth Derby favorite in the last two decades to be knocked out of the race by illness or injury; it happened to Lord Avie only last year. "It's a once-in-a-lifetime thing, to run in the Derby," Imprescia said. "It just wasn't meant to be, I guess." He is realistic enough to know that neither he nor the Martins will ever have a chance like this again.

Even the trainers whose horses will benefit from Timely Writer's absence shared Imprescia's pain. "You wait all your life and hope and dream," said Wayne Lukas, trainer of the California horse, Muttering, "and then you wake up and your horse has got a problem. When it happens, your guts knot up. It's absolutely devastating."

While Imprescia's Derby hopes were being ruined, the defection of his horse had to raise the hopes of 20 sets of owners and trainers. Timely Writer may not have been an invincible superhorse, but he was a standout favorite to win the 108th Derby. He had the necessary stamina; he had the acceleration; he had the consistency. Ironically, one of his other virtues had seemed to be his physical durability.

In his absence, this will be one of the most wide-open, inscrutable Derby fields in history. But the picture may be clarified a bit after today's Blue Grass Stakes at Keeneland.

Linkage, the odds-on favorite, has compiled a record worthy of a Derby horse: he has raced nine times, winning seven and finishing second twice. But all of his stakes victories came in Louisiana this winter, and it is difficult to judge his class on the basis of those performances in the hinterlands. His trainer, Henry Clark, doesn't know quite what to make of him, either. "I'm not convinced he really wants to go a mile and a quarter," Clark said this morning. "He'll have to run very convincingly and come out of the race well for us to go in the Derby."

The trainers of Linkage's challengers would be happy to find any justification to go on to Churchill Downs. Bert Firestone hopes that D'Accord will recapture the form that made him one of the top 2-year-olds in the country last year; he folded so badly in his last start at Keeneland that one of the local writers dubbed him "D'Accordion."

Trainer Edwin Gregson hopes that Gato del Sol will improve now that he has left California's speed-favoring tracks; his stretch runs fell short in all of his races on the West Coast this winter.

Lucien Laurin, who won the Derby with Secretariat and Riva Ridge, would love to do it again with Stage Reviewer, a colt he bred and owns. He knows that he may be grasping at straws--like most of the other people with horses in the Blue Grass. But with Timely Writer out of the running, just about any owner or trainer can be forgiven for entertaining dreams that would have seemed impossible two days ago.