IN WHAT HAS ALL THE POTENTIAL OF becoming a Little Rock Christmas tradition, Jennings Osborne's neighbors are mad at him and the Arkansas supreme court has ruled against him. But Osborne, 51, owner of a pharmaceutical testing company, is still dreaming of a bright Christmas—if he can just find a way to keep the crowds away.

Osborne began his adventures in illumination eight years ago, when he hung 50 strands of outdoor lights for the enjoyment of his wife, Mitzi, and their daughter Breezy, then 6. His appetite for light only whetted, Osborne went on to buy the houses on either side of his home, installed underground wiring and 400 electrical outlets and turned the entire layout into a blinding extravaganza of 3.2 million lights strung across cutout angels, reindeer, Santas, Christmas trees, wise men and carousels. Late in 1992, Osborne's neighbors, irked by nightly gawkers, noise and traffic jams, decided to sue, a decision that has cost them $100,000 in legal fees so far. "It's a matter of normalcy giving way to absurdity," said one.

This month the Arkansas supreme court agreed, calling the display a public nuisance and ordering Osborne to tone it down "substantially." Osborne, however, claims the ruling infringes on his religious freedom and vows to take his case to the U.S. Supreme Court. "All the little kids... they've grown up with it," he says of his now dimmed display. "It's Christmas. It's magic."