The San Diego Yacht Club will announce Wednesday whether it's ready to send Dennis Conner out to sail for the America's Cup next summer, three years early and against his wishes. As far as one Cup veteran is concerned, the answer should be yes.

"The thing for San Diego to do right now," said Gary Jobson, "is get on with it. Get Conner home and working. Build a boat and go sailing. If they get to work they'll still have a good chance."

A New York State judge ruled last week that SDYC must answer a New Zealand challenge to race head-to-head for the Cup in August in boats twice the size of the one in which Conner won the trophy in February.

Conner's forces must decide whether to appeal the ruling, prepare to race, or both, the last of which seems most likely. Their decision is due at a news conference Wednesday. Meantime, the San Diegans have "gone to the ground," as one West Coast observer put it.

Amid reports of confusion and division within Sail America Foundation, the organizer of Conner's Cup defense, officials slammed the door on inquiries. Jobson, a member of San Diego's America's Cup Defense Committee, was a rare insider willing to venture an opinion.

What will San Diego do?

"The mood is to race wherever they can win it," he said. "There's talk about going to Santa Cruz or Hawaii," to race where heavy winds blow.

New Zealand banker Michael Fay, who won in court the right to a quick rematch after failing to beat Conner in racing off Australia last winter, already has a huge, 120-foot boat in the works, designed for the light winds of San Diego.

Racing in heavy weather would put him at a sharp disadvantage, and New Zealand sources said they may challenge Sail America's right to move the regatta from its home waters without the challenger's consent.

Meantime, while Conner was in Australia this week, his forces back home were wrangling over what to do.

They don't appear to have many choices. New York State Supreme Court Judge Carmen Ciparick ruled last Wednesday that Sail America must either "accept the challenge, forfeit the Cup or negotiate agreeable terms with the challenger." Sail America has made it clear it won't forfeit.

Jobson said John Marshall, who coordinated the design of Conner's Cup winner Stars & Stripes, has his designers creating a boat to beat Fay's.

As the saga develops, here's the background:What happened?

After Conner won the Cup for SDYC in February, the club promised to name a site, date and boat type for the next competition quickly. Insiders expected a 1991 regatta off San Diego in 12 meters, the chosen Cup yachts for the last 30 years. But by early summer, no decision was made as factions fought over the $1 billion event.

Fay, the 1987 Cup runner-up, grew impatient and with his lawyer reread the 100-year old Cup Deed of Gift, seeking to speed up the process. They were shocked to find the right to name the racing date and type of vessel was not the Cupholder's, but guaranteed to any challenger with a boat up to 90 feet in waterline length who gave 10 months' notice.

Fay challenged under the antiquated rules, San Diego ignored him, Fay went to court and won. The 10-month waiting period, after court delays, now expires in August. Fay says he'll be ready to race. Who may compete?

At least four nations plan to build 90-foot-waterline boats and race Fay for the right to challenge. Fay has welcomed the Japanese, Australian, English and French entries, but Sail America evidently will use the rules to keep it a two-boat race, improving its chance of winning. Fay and the other potential challengers will meet next week in New York to map strategy to thwart San Diego.Where will races be?

The New Zealanders expect to race off San Diego and designed their boat accordingly. Conner's people are pondering Hawaii, Santa Cruz near San Francisco and other heavy-weather sites. Sources close to Fay believe under Cup rules and traditions the racing must be in the home waters of the Cupholder, except by mutual consent, and they will contest any venue change.What kind of boats?

Fay is building a 90-foot, single-hull, lightweight, fiberglass sloop which may use a crew of up to 40, the largest boat permitted under the rules. Conner's designers could come up with something similar, or may try to design a catamaran within the rules. New Zealand would challenge the legality of a catamaran.When?

By Cup Rules, racing would be in late August, though Fay and Conner could agree to a different time. Fay said he's willing to negotiate an agreeable date "in the best interests of the competition," but is wedded to racing in 1988.What sort of races?

Cup rules say unless rivals agree to a different format, the finals would be best-of-three; two 20-mile races and one 39-mile race, all in ocean waters. In modern times, a best-of-seven, Olympic-course final has been agreed to, and Fay said he would like to continue that.

As interest builds in San Diego's response to the unprecedented challenge, Fay is turning up the rhetoric to force Conner's hand.

"It's time for the San Diego Yacht Club to show that it will defend the America's Cup in the spirit of sportsmanship and fair play that the world expects from America," he said yesterday.

Then, sharpening the needle, he added, "San Diego Yacht Club, representing 250 million Americans, should face up fair and square to the challenge from 3 million New Zealanders."