Myths and Magic : SWEET MEDICINE, <i> By David Seals (Orion Books: $20; 250 pp.)</i>

“Sweet Medicine” is at once angry and funny, a sprawling satirical commentary on contemporary American Indian life masquerading as a postmodern romance.

It is an antic chase story in the tradition of “The Milagro Beanfield War” and “The Monkey Wrench Gang,” in which the Indian protagonists turn the tables on their bumbling pursuers and thumb their noses at authority. But it is also a pilgrimage of self-discovery and transformation that brings its characters to a deep awareness of their purpose in life through the myths and magic of traditional Indian spirituality.

The book is flavored with bitterness at the way Indians have been treated during 500 years of contact with European culture, and author David Seals never passes up a chance to lampoon the religion and mores of mainstream America. But he resists romanticizing his Indian characters, nearly all of whom are flawed or foolish.

“Nobody is more disgusted with the way Indians have screwed up than I am,” writes Seals, who is of Welsh-Huron ancestry. “But at least they don’t go around raping entire continents and annihilating whole species of plant and animal life and then tell themselves what good fellers they are!”

“Sweet Medicine” revisits characters Seals introduced in “The Powwow Highway,” the privately published 1983 novel that later was made into a cult movie. In the first book, Cheyenne Indians Philbert Bono and Buddy Red Bird drove from Montana to New Mexico in a 1964 Buick LeSabre “war pony” called Protector to liberate Buddy’s beautiful, drug-dealing sister Bonnie from jail.

The sequel begins the next day, with Philbert, Buddy and Bonnie hiding out at the ancient pueblo of Picuris near Taos. Lawmen are hunting the fugitives, but Philbert and Bonnie are discovering (and acting on) an intense mutual attraction.

“Philbert and Bonnie were madly in love. No greater nuptial ceremony had ever been performed in the sacred halls of the Heavenly Palace than had been seen between these two.” This is Seals waxing lyrical in the voice of his alter ego, Storyteller. A wizard of sorts who’s along for the ride, Storyteller is always reminding us that this is his tale to tell, to wit: “Philbert was still pretty much the same big fat slob that he had been when he busted Bonnie out of the Santa Fe city jail yesterday, but he was more imbued with the essence of the sacred fertility king than ever.”

A series of mystical encounters impel Philbert and Bonnie to reclaim their Cheyenne heritage by returning the Sacred Bundle she has sewn to their ancestral home at Bear Butte in the Black Hills of South Dakota.

But first they must elude the dragnet. A contingent of Indians from various tribes converges on Taos, where they take over a TV station and stop tourists on the road to the ski area to levy a toll. Predictably, all hell breaks loose, and Seals is in his element.

“Somehow, a running war had begun inside the tranquil borders of the World’s Greatest Democracy, and there were even a few people who said it was none too soon. It was long overdue, they said.”

In Seal’s gleefully chaotic fantasy world, the cops are always of the Keystone variety, and the minions of the high and mighty are inevitably inept. Police cars may explode and bullets may fly, but no one is seriously hurt.

Fleeing the mayhem, Bonnie is overtaken by an Indian sorceress who tries to kill her. The sorceress, it seems, had been a devout Catholic as a child, but she grew up to be evil. Storyteller pauses in his narrative to lecture the non-Indian reader:

“You brought all this suppression and disease about The Devil into our hemisphere. You brought the sickness of guilt and sin with your missionaries.”

The chase resumes, creating more comic possibilities. Bonnie and Philbert--now calling themselves Red Bird and Whirlwind as a result of a vision that they literally share--and a band of their followers steal a herd of racehorses, meet up with muddled New Age spiritualists and dodge the U.S. Army as they make their way homeward.

Through it all, Seals challenges his non-Indian readers to suspend their disbelief long enough to entertain the possibility of a different reality as he seeks a place where magic and dreams have the power to confront and overcome evil.