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On Jan. 14, two cable company workers made their way through the dungeonlike tunnels that snake beneath the city. They were conducting a routine inspection, about 50 feet beneath a health club where Mayor Richard Daley goes to lose weight.

At one crook in the tunnel, they saw something startling. About 20 feet of the interior wall was cracked. The masonry was peeling away like loose fat from a lamb shoulder, and the Chicago River was starting to work its way inside. They had to slog through thick river silt that rose past their knees. Water was leaking everywhere.

”This is a cave-in!” one worker for Chicago Cable Television exclaimed as his partner recorded the scene on a videocassette. ”You can see what`s cracked off in here.”

Cable company officials said they tried to tell city officials what they had seen, but they had a hard time locating the bureaucrat they usually dealt with in the Department of General Services. Ironically, a city reorganization plan designed to increase government efficiency had made it tougher for them to locate the city worker, cable officials said.

Then, in late February, cable company workers accidentally ran into that city worker down near the tunnel, and company officials say their employees urged the city worker to inspect the damaged site.

According to Robert Thompson, senior vice president of governmental affairs for Telecommunications Inc. of Denver, Chicago Cable`s parent, the city worker told the cable company surveyors: ”Call me tomorrow.”

According to the company, cable workers ran into the same city bureaucrat a second time near the tunnels on March 2 and asked about the city`s assessment of the damage.

”Yeah, we`ve seen it,” the city official said, according to Thompson.

The company`s report of damages shuffled between City Hall bureaus like a citizen`s complaint about a lost dog.

That was the account emerging Wednesday from Chicago Cable Television, which leases space in the coal tunnels to run high-tech fiber-optic cable and equipment.

As divers and construction crews fought the flood Wednesday, Daley`s top aides scrambled to figure out why the mayor`s chronology of bureaucratic mistakes that led to the disaster differed so much from a timetable released by Chicago Cable.

On Tuesday, Daley said city inspectors did not see the damaged tunnel until March 13. But according to the cable company`s account Wednesday, a city worker acknowledged seeing the damaged tunnel before March 2-at least 11 days earlier than Daley`s version.

It is unlikely that the time difference would have had much impact on the city`s response to the leaking or saved the Loop from flooding. But the discrepancy between city and cable-company accounts raises additional questions about the bureaucracy`s seemingly casual response to the tunnel breach in its early stages.

As the effort to stop the water flow continued, Daley`s administration tried to stem the legal and political fallouts from the disaster that might have been averted by spending between $10,000 to $50,000 on repairs.

While City Hall appeared to be deserted Wednesday, with lights off in many offices, spotty phone service and staffers grimacing at portable toilet facilities in the hallways, desperate work was being done.

Corporation Counsel Kelly Welsh huddled with other city lawyers throughout the day, interviewing city workers and other potential witnesses. The steady stream of city workers and others to the fifth-floor law department gave Welsh`s outer offices the look of a police station waiting room.

Among those who spoke with Welsh were representatives of Great Lakes Dredge and Dock Co., the Oak Brook-based construction firm whose work on Chicago River pilings at the Kinzie Street bridge last year may have precipitated the tunnel collapse, according to Daley.

Great Lakes declined comment Wednesday about the meetings with city lawyers. Also interviewed by city lawyers were workers from the Department of General Services and other agencies. One unidentified city worker was in Welsh`s office for at least four hours.

General Services Commissioner Benjamin Reyes, whose department first learned of the leak, declined to comment Wednesday night on his department`s role in the events.

But John LaPlante, the former acting commissioner of the Transportation Department who was fired Tuesday by Daley, said Wednesday that he had been given conflicting advice about the severity of the tunnel damage.

An April 2 memo to LaPlante, written by Chief Bridge Engineer Louis Koncza, said that repairs should begin ”immediately” on the tunnel. But LaPlante, whose expertise in government was largely confined to traffic engineering and roadwork, said that other department officials told him that the city had time to issue bids rather than begin immediate emergency repairs. He said Koncza`s initial $10,000 estimate for the work was about five to seven times lower than two informal bids he sought.

But LaPlante acknowledged that he had erred in not pushing the matter up the bureaucratic ladder at City Hall and absolved Daley`s other aides of any blame.

One news report claimed that Edward Bedore, the city`s chief financial officer and a top Daley aide, blocked emergency repairs on the tunnel by witholding funds.

But Daley dismissed the charge as baseless and said it was inspired by Bedore`s enemies. LaPlante also said that he never informed Bedore of the problem.

”There is no indication whatsoever that the budget office ever heard of that,” Welsh said. ”There is no indication that anyone outside the departments of General Services and Transportation knew anything about this at all.”

Welsh also took pains to absolve Reyes from any blame, saying that while Reyes` department learned of the leak more than a month before LaPlante, the information apparently never reached the commissioner.

”There is no indication whatsoever that he (Reyes) knew anything about it,” Welsh said.

But Welsh would not rule out further firings as a result of the investigation, saying the proceedings were still ”very preliminary.”