This city is still feeling the reverberations of the moment nearly two years ago when steel ripped through steel and two suspended ''skywalks'' collapsed at the Hyatt Regency Hotel, taking the lives of 114 people at a Friday night tea dance.

The hotel disaster, which caused this city to agonize over how it could have happened and who was to blame, has also become part of a national discussion over construction practices. It was brought up last month as an argument against a Reagan Administration move to eliminate an agency of the National Bureau of Standards that conducted the only impartial investigation into the cause of the skywalks' collapse.

Locally, the disaster continues to color politics and government. Seventeen city building inspectors and two code enforcement officials were dismissed or suspended or took early retirement last month after local newspapers revealed that mileage logs listing inspections at construction sites had been falsified.

The revelations, an indirect aftermath of the hotel disaster on July 17, 1981, led to a shake-up in the top ranks of the city department responsible for building-code enforcement. They have also become a campaign issue in the mayoral election, to be held Tuesday. Investigations Still Under Way

In addition, the Missouri licensing board asked the state Attorney General's office this month to join in its investigation of some of the architects and engineers who took part in the design, construction and inspection of the Hyatt Regency. The Federal and county authorities are also still conducting inquiries into aspects of the disaster.

The continuing specter of the worst building failure in the nation's history has frustrated those who wish the tragedy could be quietly put aside.

''You have to go on living,'' said June Zatezalo as she haltingly described the night her husband, Rudolph, a onetime Democratic politician, was killed. Mrs. Zatezalo was injured, along with more than 200 other people.

''It was a terrible tragedy,'' she said, adding, after a long pause, ''But it's over now.'' Hallmark Cards Inc., the parent company of the hotel's owner, agreed in January to a $10 million settlement in Federal District Court of a class-action lawsuit seeking punitive damages; $6.5 million of that amount was set aside as donations to charitable and civic endeavors. The company said it was making a ''healing gesture to help Kansas City put the tragedy of the skywalks' collapse behind it.''

Last week Don Hall, president of Hallmark and son of Joyce C. Hall, the founder of the company who died Oct. 29, reflected on his father, the company he built, its tradition of quality - and then briefly on the disaster.

''It was a gigantic tragedy,'' he said in an interview. ''It was a very demoralizing, depressing affair for me and for people in this corporation. I think I still have trouble at times realizing that it did indeed happen.

''But it did, and I think the company has been able to get its dobber back in good shape, and I think I have as well, maybe a little more slowly than the company,'' he continued. ''But it has been a discouraging thing to have on your mind, and I found it at times very difficult to cope with. But I am looking forward to the day when it will all be back in the background and the community can in fact - not forget it, it's not one of those things you forget - but push it back to the back of their thought process and move on. And I think I have been able to do that fairly well, and I hope the community can, shortly.'' A Model Response

Seldom has a city's establishment been so emotionally torn by catastrophe as Kansas City's was after the fall of the 120-foot-long suspended walkways bridging the Hyatt's atrium lobby on the second and fourth floors. Harsh words and allegations abounded, and the term ''vendetta'' was often used. Targets of criticism included the local newspapers, judges, lawyers and the hotel's developers.

All this followed an outpouring of volunteer emergency assistance and support for the victims and their families that has been studied across the country as a model of community response to disaster. The coming together of the rescue effort and emergency aid included medical triage teams forming at the hotel, blood donors lining up by the hundreds at blood centers and construction workers bringing their skills to help those trapped.

''But then, after that immediate crisis had been met, the whole tenor of the community changed,'' said Charles J. Egan, a vice president and general counsel for Hallmark Cards, whose wholly owned subsidiary, the Crown Center Redevelopment Corporation, owns the hotel. ''The dynamic forces in the community suddenly became polarized in a squabble over who was at fault and how was he going to be punished. And the injured and the dead who had been temporarily taken care of were really forgotten.

''It was as if things swung 180 degrees in that period between 7:15 Friday evening and 7:30 Saturday morning,'' he said.

In Mr. Egan's view, there was a ''finger-pointing contest'' that distracted attention from the victims for a long time, until antagonisms began to ease.

By the time most of the lawsuits were filed in the months after the collapse, the amounts sought totaled $3 billion. One lawyer acknowledged that the $250 million in damages he had filed for was a figure he had pulled out of the air.

Since the litigation and negotiation of claims began on the first Monday after the collapse, there have been 285 settlements totaling $52.9 million, according to a lawyer with the firm representing the insurance companies covering the three major defendants, Hallmark, Crown Center and the Hyatt Corporation. There are still about 60 major cases yet to be decided, the lawyer said.

Another source close to the litigation said legal costs for Hallmark, including attorney fees, fees for technical experts, expenses and other such costs were nearing $4.5 million.

About 1,300 people have accepted offers of $1,000 each made to anyone who was in the hotel the night of the tragedy, even if they were not injured. One couple, Neal and Sally McCaffrey of Overland Park, accepted such an offer and donated the money to a fund for people needing help to pay energy bills.

GET ONLY ADD HYATT

Much of the antagonism surrounding the disaster centers on disputes between lawyers representing clients in state court and those with clients in the Federal court. In these disputes, including motions filed with the United States Court of Appeals for the Eighth Circuit, lawyers sought to disqualify judges and counsels for a variety of reasons and to dissolve the class action suit in Federal court.

The litigation of death and injury cases is continuing, although the question of punitive damage claims has been all but resolved with the $10 million settlement of the Federal suit and a $20 million settlement of a class action lawsuit in state court. The two funds will pay victims who press individual claims in court.

There has been high praise for the work of both Federal District Judge Scott O. Wright and Judge Timothy O'Leary of the Jackson County Circuit Court.

''Judge O'Leary, in the way he conducted the injury and death cases, most of which were in his court, and the way he managed the insurance litigation was exemplary,'' Mr. Egan of Hallmark said. He noted that the judge had devised a method for the maze of insurance companies to form a pool of money now to pay victims' claims, with actual liability of each of the insurers to be determined at a later date.

He praised Judge Wright for the Federal Court settlement, saying he ''deserves a very special salute'' because he sensed a need for a symbolic type of gesture so the community could move forward and deal with its economic, social and cultural problems.

Judge Wright said the settlement ''permits the Kansas City community to end its daily preoccupation with the events of that tragic evening.''

In both settlements, the defendants denied liability for damages, both compensatory and punitive. At the time of the settlement in state court, victims' attorneys said they could find no evidence to support the award of punitive damages against the major defendants.

But Robert C. Gordon, one of the class-action counsels in Federal court, said that while he supported the final settlement, he would have preferred to see the case go to trial. He said that even if the plaintiffs lost, the case would have put construction interests across the country on notice to assure the safety of their buildings. 2 Institutions at Odds

After the disaster, two of the city's most respected institutions, Hallmark Cards and the company that publishes the city's two major newspapers, found themselves in bitterly opposing camps for the first time.

For about 16 months after the collapse, the two newspapers of The Kansas City Star Company, The Star and The Times, published many articles detailing such things as design changes that had weakened the skywalks support systems, a finding verified by the National Bureau of Standards in its investigation. The papers' investigations also found structural failures and defects that arose in the construction of the hotel, lapses in engineering and construction practices, and faults in the city's code enforcement department.

Answering the scores of lawsuits filed in the case, the hotel owner, its parent company and other defendants - the hotel's architects, engineers, contractor and operator - denied any responsibility for the faults or any liability for the disaster.

''The supreme tragedy and irony beyond the deaths,'' said Michael J. Davies, president of The Star Company and editor of both papers, was that Hallmark ''for 70 years or 75 years never had a really bad line of press anywhere and suddenly had to deal with this terrible tragedy and the implications that went along with it.''

With the more than 300 people killed or injured and the 1,500 or more in the lobby area of the hotel that night, Mr. Davies said, ''it seemed to me at least that virtually half the town was affected directly or indirectly by the horror of the tragedy.''

''When the Hyatt tragedy happened,'' he continued, ''the town was at a turning point, catching its breath from that tremendous progress of the 70's, looking around for new leadership and looking around for a new way to go. And this came as a stinging blow to community pride, and I think an awful lot of people, particulary businessmen, felt this was a public relations black eye and the press was to blame for spreading the detail around the country.'' Papers Win Prizes

Mr. Davies said that while relations between Hallmark and The Star and The Times had improved, they probably could never reach the level of times past. He said the newspapers had done what they thought they had to do.

When the two newspapers were awarded the Pulitzer Prize for excellence in local reporting on the Hyatt disaster, they were cited for working in the face of strong community opposition.

Today in the Hyatt Regency, where there had been three skywalks in the lobby, there is now only one huge one on the second floor, supported by massive pillars, rather than suspended by 1 1/4-inch steel rods. In the collapse, such rods pulled through steel box beams supporting the walkways.

Some $5 million has been spent to reconstruct the hotel, and local authorities say that has made the building possibly the safest in the country.