Arts and entertainment reports from The Times, national and international news services and the nation’s press.

THE ARTS

Diplomatic Standoff: The centerpiece production of next month’s Lincoln Center Festival 98 in New York may be in jeopardy. Officials at the Shanghai airport on Thursday prevented shipment of sets and costumes for “The Peony Pavilion,” a 400-year-old epic opera to be performed in a “world premiere re-creation” by the Shanghai Kunju Opera Company. According to a Lincoln Center spokesperson, authorities in the Shanghai Municipal Bureau of Culture, one of the production’s sponsors, have objected to the treatment of sexuality and to other aspects of the script that they say depart too far from Chinese tradition. The 22-hour opera--scheduled to be presented over six nights--tells the story of two lovers and has been likened to “Romeo and Juliet.” Lincoln Center Chairwoman Beverly Sills has enlisted the aid of her friend, former Secretary of State Henry Kissinger, and the festival’s director, Nigel Redden, is working with the U.S. State Department to resolve the problem. Negotiations also reportedly include the French Foreign Ministry, because the production is scheduled to move to Paris in the fall. Lincoln Center now hopes that the sets and costumes will leave China on Sunday, which would allow “The Peony Pavilion” to open the festival as planned on July 7.

*

Symphony Returning: Two years after the San Diego Symphony Orchestra declared bankruptcy, a judge has accepted the company’s reorganization plan, clearing the way for the orchestra’s return. The company is planning to resume operations July 24 with a 20-performance pop concert series. The 78-piece ensemble’s first regular season would then open in October at Copley Symphony Hall. More than half of the $6.2 million for the first year has already been raised.

TV & MOVIES

Schroeder Joining ‘Blue’: Rick Schroeder, the former child star best known for the movie “The Champ” and TV’s “Silver Spoons,” will be the next detective to take center stage on ABC’s “NYPD Blue,” a spokeswoman for series creator Steven Bochco confirmed Friday. He will replace Jimmy Smits, who is leaving after the first few episodes of the season.

*

Medical Report: “Lamb Chop” puppeteer Shari Lewis has been diagnosed with uterine cancer. Lewis, 65, will begin treatment for the disease Monday in Los Angeles. Her PBS series, “The Charlie Horse Music Pizza,” will shoot around Lewis for the time being, allowing her to return when she is able. “Shari has the constitution of a tank, she’s so strong,” said her spokeswoman. “Still, we ask everyone to have good thoughts.” . . . Actor Carroll O’Connor, 73, was scheduled to undergo surgery at UCLA Medical Center Friday afternoon to remove a blockage in his right carotid artery. The problem was detected during a routine physical exam, the actor’s spokesman said; O’Connor had been experiencing no symptoms. He’s expected to remain hospitalized for several days. . . . On a more positive note, film critic Gene Siskel, 52, returned to his “Siskel & Ebert” show this week after undergoing surgery last month to remove a growth from his brain. “To Hollywood I just want to say: ‘Just when you thought it was safe to make a bad movie, I’m back,’ ” he said.

*

Humanitas Nominees: The controversial, canceled ABC priest series “Nothing Sacred” has been nominated for the Humanitas Prize, competing with NBC’s “ER” and “Homicide: Life on the Street” for best 60-minute TV program. Another hourlong drama, ABC’s “NYPD Blue,” was nominated in the 90-minute or longer category for an extended episode, “Lost Israel.” Other nominees for Humanitas awards, which honor TV programs and movies that “do the most to communicate human values to their viewers,” include the just retired CBS comedy “Murphy Brown,” which will compete with NBC’s “Frasier” and PBS’ “Foto-Novelas” for best 30-minute TV program. Feature film nominees, meanwhile, are “Contact,” “The Education of Little Tree” and “Good Will Hunting.” Winners will be announced July 9.

*

Master of the Auction Domain: A 78-page script from the infamous “Seinfeld” episode “The Contest”--signed by all four cast members--fetched a whopping $23,000 at a New York auction of entertainment memorabilia Thursday. Christie’s pre-sale estimate had been only $1,500 to $2,000. Meanwhile, a 22-foot-long working ship model from a 1953 “Titanic” film--expected to bring $12,000 to $15,000--failed to sell when bidding stopped at $6,000.

QUICK TAKES

KCBS-TV Channel 2 has won the Radio-Television News Directors Assn.’s 1998 Edward R. Murrow Award for the country’s best large market newscast. . . . National Geographic Television and cable’s the Learning Channel will receive the Academy of Television Arts & Sciences 1998 Governors Awards at this year’s Emmy Awards. TLC was selected for “encouraging literacy and creative thinking” through its “Great Books” series, and National Geographic TV was chosen for its “consistent innovation” in producing “compelling, quality family programming.” . . . Actor George Clooney, who’s said he’ll leave NBC’s “ER” after next season, has signed a two-year deal with CBS to develop and produce a 13-episode series and two TV movies. He has not, however, agreed to star in the projects, which he will produce at Warner Bros., the home of “ER.” . . . KCET-TV Channel 28’s board of directors has approved a $46.8-million budget for the L.A. public TV station for fiscal 1999. The budget is based on the station’s projected revenues; KCET’s fiscal ’98 budget was $47.3 million.