America's Cup defender Liberty managed a daring last-minute fix of a major breakdown just before the start of racing today, but the repair gave way and the crippled yacht became the first American boat since 1934 to lose two races in a final cup series.

Australia II trailed at the start, but within a couple of miles retook the lead and never gave it up, finishing 1 minute 47 seconds ahead on a windy, hazy day. She trails Liberty, 3-2, in this best-of-seven series and still could be eliminated with a loss in the next race Thursday.

Nearing the end today, Australian radio reporter John Raedler was beaming a message from the race course back to his homeland, where it was still hours before dawn, to "wake up the wife, wake up the children, wake up the dog. Get them up to celebrate the greatest day in the history of Australian sport."

And indeed it was a remarkable day of yachting. There was drama on the high seas as two Liberty crewmen scrambled 70 feet up the mast and hung there for half an hour as the boat pitched and rolled, trying to fix a broken fitting while the clock wore down to starting time. They just made it, and didn't come down until after the 10-minute starting sequence had started.

There was a mad dash by Liberty's fastest support boat, a 25-foot twin-engine skiff, which raced eight miles back to Newport to fetch a spare part and roared back to the race course at full throttle to deliver it.

There was a startling reversal of fortunes at the start. Liberty skipper Dennis Conner barely got his boat under control in time to engage Australia II in prestart maneuvers, then had to change sails in the middle of the maneuvering when his first selection ripped.

But in a tactical coup he still managed to force Australia II skipper John Bertrand over the line early. Bertrand had to recircle after the gun, recross the line and was 37 seconds behind as the boats headed upwind on the first leg of the six-leg, 24.3-mile course. It was the second straight time Conner humbled Bertrand at the start.

But Conner said the repair broke again shortly afterward and he began having trouble controlling his mainsail. The broken piece was part of a metal strut that holds the top of the mast steady.

Worried about stressing his crippled mast, Conner said he decided to let Bertrand go off on his own on the race course, rather than following the normal tactic of staying close on top of the trailing boat.

Bertrand went to the left, Conner to the right and when they converged again two-thirds of the way to the first mark 4 1/2 miles upwind, Bertrand had a narrow lead. He rounded the mark 23 seconds ahead.

Conner stayed close through the next two legs and was only 18 seconds behind when the boats turned upwind again for the fourth leg, but Bertrand started a series of tacks (the zig-zag maneuvers a boat must take to sail against the wind) back and forth across the course and this time Conner felt he had to follow.

"We were aware the mast could break," said Conner, "but we just kept our arms and heads out from under the boom," which could have come crashing down. He said he figured if the mast broke it would be a lost race, the same as if he didn't try to compete, so he took the daring route.

The mast held, but Bertrand's sleek white boat with its controversial winged keel was going better, and by the time they rounded the fourth mark Conner was a dozen boat lengths and 1 minute 11 seconds behind. That's when Raedler sent his message home to Australian listeners.

The Australian victory came in the kind of heavier wind conditions that are supposed to be Liberty's strength as the race started in 18 knots of wind and finished in 16 knots. It was a great equalizer for Australia II, which was victimized itself by gear breakdowns in the first two races to fall behind, 0-2.

"This proves we can win in any wind conditions," said Bertrand. "It was a do-or-die effort."

The Australians were met by a cheering crowd at their dock when they returned to Newport harbor, the first challengers to win two races in the finals since the competition switched to 12 meters in 1958.

Liberty sail trimmer John Marshall said the broken strut on the mast would be repaired tonight and the yacht will be race-ready Thursday morning. A cold front is expected to pass through late tonight and Thursday's races are expected to be in a moderate, autumnal northwester.

Australia II flew a protest flag just after the start, apparently because in the chaos surrounding Liberty's repair job the crew let a sail bag fall overboard. But with the victory, Bertrand said the protest was dropped and he declined to discuss it further.

"We can't make any more mistakes," said Australia II syndicate chairman Alan Bond. "We've got to win the next two and we will."

"Aussies always do their best when their backs are against the wall," Bond said.

Conner heaped praise on Tom Rich and Scott Vogel, the two crewmen who made the short-lived repair. He said they were "battered and bruised" by their long stint on the lurching mast. "There aren't too many people you could pay to do it in those seas," Conner said.

"I won't feel comfortable until we win," Conner added, explaining how the broken jumper strut "crippled our chances."

The strut broke about 45 minutes before the starting sequence, Conner said, and a flurry of radio conversation followed as Liberty tried to assess the damage. At one point Liberty navigator Halsey Herreshoff asked the Coast Guard about flying out a replacement part by helicopter, but the government service responded that it could not do so unless there was a danger of personal injury or loss of life.

Danger of loss of life there wasn't, but loss of cup now becomes more likely than it has been in half a century. On Thursday, a victory for Liberty keeps the cup: one for Australia II keeps the cup match alive.