EIGHT-year-old Hemil Collado is drawing apple trees again. "Until now, everything has been about war. Everything black. Bombs. Bodies. Warplanes," says Isabelle de Collado, his mother. She points to her son's artwork proudly adorning a wall: "There's more life and fantasy now. More colors."Like Hemil, residents of Panama's toughest barrio, El Chorrillo, are starting to put the past behind them. Two years ago today, 26,000 United States troops invaded Panama to oust dictator Manuel Antonio Noriega. Shortly after midnight, exploding shells and tracer bullets split the night and tore through the wooden slum shacks surrounding the headquarters of the Panama Defense Forces, a target of the attack. The Collado family huddled for hours in their cement-walled kitchen, the only area of the rat-infested tenement offering some protection. Unlike some, they escaped before their home was set ablaze by the crossfire and fleeing Noriega troops. When the fighting ended, most of El Chorrillo was in ashes. Some 2,700 families spent Christmas 1989 in a nearby sports field, sleeping in tents made of parachutes provided by the United States. Since then, the US has spent $23 million in aid to feed and shelter the homeless in an old aircraft hangar, as well as replace or repair the buildings destroyed. Each displaced family was given $6,500 and three ways to use the money: build a new home, pay for a new house in a development outside Panama City, or pay for construction of a new apartment in El Chorrillo. Only about one-quarter of the Chorrilleros chose to return to their old neighborhood. "I grew up here. My church is here," Gregoria Salazar explains, trudging up three flights of stairs to her tiny, stifling hot apartment. But after waiting a year and a half, Mrs. Salazar hardly seems pleased with her new home. "There's no ventilation. Look at the windows, they're totally closed," she says, pointing to small checkerboard holes in the wall. "It takes three days to dry clothes. The mold in the bathroom is permanent," she complains. She is briefly interrupted when Dario, one of the 11 other family members living in the apartment, squeezes past carrying a foot-long baby crocodile. "When it rains," Salazar continues, "the wind blows the water through the window, soaking the sofa." The rainy season in Panama lasts eight months. Most residents don't blame the US for the problems. They blame the Panamanian government and crooked contractors. Says Edward Smith, who heads a neighborhood committee called Refugees of the War: "The colors [the buildings have been painted] are beautiful. But we need more than pretty colors." His committee has asked the Panama legislature to properly complete repairs to damaged apartments and a local school, to kick in $3,500 per family to cover lost furniture, appliances, and clothes (the US has paid $800 per family), and to provide at least one paying job to each family. Their demands aren't landing on sympathetic ears, either in Panama or the US. "Low-income housing in Central America is not fancy. These meet the standards of low-income housing," says a US Agency for International Development official. "The people who stayed in El Chorrillo tend to be more difficult," the official adds. "Others chose to see the silver lining. They wanted to change their way of life and chose to live in a suburban setting." It's true the half-dozen US-financed developments outside Panama City are not in an urban setting. But the Santa Eduviges site, not far from the international airport, probably wouldn't fit the image many people would have of a "suburban setting." Some 500 unpainted one-room cement-block houses are lined up in rows, like soldiers in formation, separated by short stretches of brown mud. Charles Callender, president of a neighborhood committee, complains that no street lights have been put in, drainage is poor, and rain seeps through the walls, soaking furniture and door frames. "This is not a $6,500 house," he says. "Fifteen-hundred dollars is more like it." Mr. Callender, 56 years old and jobless, says he made a mistake by leaving his barrio. "There's no work out here. People are selling their furniture to eat. In El Chorrillo, if I got hungry I could walk to the bay and fish. Here it costs me 60 cents and takes an hour to ride the bus into town." Cecilia Bellido worries about the cocaine dealing that simply transplanted itself from the old neighborhood to the new. "Twelve-year-old boys on drugs," she says. "It's very sad." Her husband, Daniel, makes only $200 a month as a bank security guard. "We didn't eat yesterday," she says matter-of-factly. But she has none of the bitterness of Callender. Indeed, Mrs. Bellido prefers living here: "It's better for our children." Ten-year-old Anna Maria, the oldest of four children, agrees with her mother. She says her school is better here, but she misses her old friends. The Rev. Javier Arteta, who runs the Roman Catholic church in El Chorrillo, agrees with most of the demands for compensation and jobs. But he also says: "The reality is, although they won't tell you this, most Chorrilleros are better off now."