COLUMN ONE : New Lives Take Root Amid Ashes : Some Oakland hills residents have begun rebuilding. Others still bear physical and mental scars from the most destructive brush fire in state history.

For years, retiree Fay Fasciato has taken long afternoon walks through the steep, wooded hills of Oakland. The deadly October fire did not end that habit, but it did turn the strolls into lonely outings, robbing them of the neighbors she would greet along her route each day.

Last week, the eerie mood that cloaks the charred hills melted when Fasciato spotted a solitary deer grazing on the crabgrass that carpets slopes where pricey houses once stood.

“It was a lovely sight, that first deer,” Fasciato said while pausing on her hike one recent blustery day. “My friends are all gone now, scattered all about. But seeing the wildlife return was such a lift, such a happy sign.”

It is too early to speak of rebirth, but there are subtle symbols of hope along the ridge tops blackened by the firestorm that killed 25, burned 3,000 homes and wiped out one of the Bay Area’s most eclectic neighborhoods.

Lots have been cleared of rubble and are brightened by narcissus encouraged by the recent rains. More than 50 neighborhood groups have sprung up to help fire victims with everything from insurance claims to finding lost cats.

A lucky few have already begun rebuilding their homes, providing inspiration to others unnerved by the fire’s wrath or unsure of their finances. And now, there is even a newspaper--the Phoenix Journal--dedicated solely to survivors of the blaze.

Still, the fire’s origin remains a mystery, and probably always will. And, while most survivors have replaced their wardrobes and begun weaving their lives back together, others remain hospitalized with severe burns or mired in therapy, struggling to cope with the trauma they endured on that hot, dry Sunday three months ago.

“It’s not easy, and there are daily reminders that you can’t avoid,” said Dena Cruz, an attorney whose new home was lost to the flames just a week after her family moved in. “No one will ever forget the experience, but . . . you have to remember it’s all part of life. You’ve just got to go on.”

Their waifish faces, captured by a Polaroid, stare out from a photo album at the Montclair Women’s Club. Cats, dogs, a turtle or two--these are the pets turned into refugees by the Oct. 20 fire.

Most were captured by volunteers who scoured the ash-strewn hills in the days after the blaze. But some turned up along the Oakland waterfront, or in cities 20 miles away, recognizable by their singed whiskers and raw, bleeding paws. Now, 130 animals wait in shelters, hoping the “pet photo project” will reunite them with their owners.

The effort is one of dozens launched to help survivors grapple with the bewildering blizzard of details that characterize life after the blaze. There is aid available for debris removal and erosion control. For picking a contractor. For replacing lost recipes. For qualifying for victim discounts at department stores.

The most valuable assistance, many homeowners say, has come in negotiations with insurance companies. Residents talk wearily about the painstaking chore of documenting every belonging lost in the blaze, then hunting for its price. Many must obtain architect’s sketches of their lost houses and submit multiple estimates of the structures’ value from contractors.

Ina DeLong, a former insurance industry executive, is helping the newly homeless through this confusing process. DeLong, who founded a nonprofit support group called United Policyholders after the 1989 Loma Prieta earthquake, has met with hundreds of residents since the fire. One-third of them, she said, were underinsured.

Jim Penowich, an engineer at a local public television station, is one of them. Furious when he learned that his insurance will provide $140,000 less than it will cost to rebuild, Penowich recently posted a sign on his burned-out property. It reads “Settlement Unfair” and carries the name of his insurance company with a slash through it.

Penowich, 49, who has been required to inventory his losses “down to the thumbtacks in the junk drawer,” said he has yet to receive any money to cover living expenses and is relying on “the kindness of friends” for shelter.

Such experiences, DeLong said, are not unusual. Many homeowners were insured for as little as $50 per square foot--which one contractor, Doug Wallway, said is about one-third of the minimum building cost in the Oakland and Berkeley hills.

“What I am trying to do is help these people be assertive in fighting for their claims,” DeLong said. “Those who roll over and play dead don’t get what they deserve.”

Alan Siegel is providing another kind of service. A Berkeley psychologist, Siegel is studying the dreams of 50 fire survivors who either lost or nearly lost their homes.

Siegel, who recently published a book about dream analysis, believes that studying their nightly mental wanderings will help victims gain “mastery over the terrifying forces and adversaries” that typically haunt victims of traumatic events.

So far, many survivors’ dreams have been re-creations of the fire, complete with the smell of smoke, the sound of exploding tree limbs and the sight of flames closing in. Others, Siegel said, have wrestled with “wild animals, with cars careening out of control, with bombs and with many other things representing the ferocity and out-of-control nature of the fire.”

Still others are bedeviled by persistent images of loss and emptiness. One woman dreamed of seeing a homeless person pushing an empty shopping cart, a symbol, Siegel said, “of the sense of depletion, helplessness and destitution many people are experiencing in the fire’s aftermath.”

“Hopefully,” the psychologist said, “we can help people understand the meaning of these dreams, so they can put to rest some of their fears and begin healing.”

Robert Bruce, 52, lost his home and nearly everything else in the fire--his bronze baby shoes, his jazz record collection, a photograph of his grandparents’ wedding. But he got his family and most of his pets out alive, along with one other thing--his new $14,000 computer system.

Most of the free-lance journalist’s files and projects went up in flames, however. So, after the most pressing post-fire details were taken care of, Bruce decided to embark on a new career--as a newspaper publisher.

The first issue of Phoenix Journal, a free monthly publication with a circulation of 7,500, was released last week. In his debut editorial, Bruce said the eight-page paper was “by and for fire survivors” and dedicated to “rebuilding the physical and restoring the emotional.”

The newspaper, Bruce said, is designed to help survivors stay abreast of fire-related information that the mainstream media stopped providing long ago. Oakland’s city manager, for example, has proposed a bevy of changes to make the hills more fire safe, including the widening of streets that became firetraps for some fleeing residents, requiring indoor sprinklers and banning certain building materials.

Just as importantly, Bruce wants his paper to serve as a sort of spiritual glue--holding together former hill residents who are scattered in rental houses from Sacramento to San Jose.

The Phoenix Journal also serves another important function, Bruce said: “It’s good therapy for me.”

Bruce has received abundant advertising support from contractors, architects and soil engineers looking for ways to reach prospective clients. And, while some might wonder about the paper’s future once houses are rebuilt and trees replanted, Bruce believes his journal is here to stay.

“The fire,” says the silver-haired father of three, “will be the defining event for most of us forever.”

Each morning, Donald Iverson arrives at his desk at the Oakland Fire Department and hopes that this will be the day of the breakthrough. Each day, he is disappointed.

Iverson is the lone remaining Oakland investigator hunting for clues to the origin of the most destructive fire in state history. It’s a frustrating job, one he suspects he may never complete.

“We’re at a deadlock,” said Iverson, in a soft voice. “I’m an optimistic person, so I won’t give up. . . . But we don’t have much to go on right now.”

Immediately after the blaze, a task force of agencies joined Oakland in hunting for answers. They concluded that a brush fire a day earlier had kindled the larger conflagration, and--based on witnesses’ accounts--initially pointed the blame at a construction crew.

Those theories were doused, however, when the workers denied any involvement and passed polygraph tests.

Now, despite clues offered by scores of callers, a meticulous search of the site where the first fire broke out and interviews with 125 people, investigators are stumped. Iverson spends most of his days checking out dwindling leads and fielding calls from nuts, who insist that UFOs or meteorites or volcanoes erupting offshore are the culprits.

Meanwhile, Iverson and other Oakland firefighters have tried to keep their heads held high despite the torrents of criticism they have faced for their handling of the fire. In the days after the blaze, critics charged them with everything from botching the first small fire to cavalierly rejecting offers of help from other departments while Oakland burned.

A panel appointed by the state Office of Emergency Services is reviewing the disaster, a job undertaken at the request of Oakland Mayor Elihu Harris. Michael Guerin, assistant director of OES and the panel’s chairman, said a report will be issued next month.

“We’re not looking for blame,” Guerin said. “Our report will be a constructive document . . . (so) people can look back at this event and learn how we can do better next time.”

Dena and Raul Cruz were not at home at the time of the fire, but their daughter, Connor, and her baby-sitter were. The pair escaped, Dena Cruz said, only because a neighbor drove them to safety down the single remaining exit route--a narrow fire road jammed with fleeing cars.

Young Connor Cruz, 5, has had some difficult times since the fire. The low point, her mother said, came when another child at the day-care center told Connor “that she was a bad girl and that’s why the fire ate her toys.”

The fire also ate the family’s two birds, but the couple could not bear to share that news with Connor. Instead, Raul Cruz, a physician, bought a new cage and set out one day to find the “escaped” birds, returning triumphantly a few hours later with two finches.

Eleven people died on the Cruz’s street, Charing Cross Road. Two of their neighbors remain in Alta Bates Hospital, with third-degree burns over 40% of their bodies.

Nonetheless, the family is rebuilding on their steep lot--one of only a handful of people to receive city permits so far. The foundation and frame are completed, and the contractor promises they will be able to move in by May.

Nearby, the wreckage of many burned homes is posted with defiant signs declaring that “This Property Is Not Abandoned.” One foundation, on Hawks Hill Court, bears a Christmas wreath, complete with a festive red ribbon.

“The community spirit is very strong here, and I believe most people will rebuild,” said Dena Cruz. “You take risks to live in the hills, but that’s part of life in California.”