With its unsparing depiction of failed marriages and faded dreams set amid the ruins of a once-grand theater, ''Follies'' became the ultimate cult musical in 1971. But the cult never grew big enough to keep the show from losing its $792,000 investment after a 15-month-long Broadway run. Luckily for ''Follies''' ardent fans, Ted Chapin observed every moment of the show's creation as a gofer assigned to fetch coffee and type daily script updates (an original and nine carbons!) for composer Stephen Sondheim and codirectors Harold Prince and Michael Bennett. Chapin -- then a junior at Connecticut College and now president of the Rodgers & Hammerstein Organization -- was the first person to read the lyrics of Sondheim's anthem of survival ''I'm Still Here'' during the Boston tryout. (Away from the theater, he put up with the flirtatious attentions of the lady who sang it -- Lily Munster herself, Yvonne De Carlo.) It's a credit to Chapin's skill as a storyteller that he makes the saga of Follies fresh and moving for readers who already know how it ends.