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“Lost Horizon.” RCA/Columbia. $29.95. This 132-minute version of the Frank Capra classic about Shangri-La is a noteworthy restoration project by the American Film Institute--but one could make a case that the original was so deftly cut to 108 minutes (there’s also a 117-minute version) that the editing improved the film. What’s been restored are pieces of scenes that work well enough without them (the differences between several prints used are very noticeable), plus one long segment involving Thomas Mitchell, Edward Everett Horton and some children--intended as comic relief, the scene seems unessential, even uninteresting, though it’s hard to judge: Only the sound track for this part (and some of the snippets) was found, so production stills have to serve for the visuals. AFI deserves credit for painstaking work and for handling the necessary compromises with taste, but some fans of this enchanting utopian idyll, which stars Ronald Colman and Jane Wyatt, may prefer the fewer distractions of a shorter version. Information: (818) 953-7870. *** 1/2