“Jim, this is crazy!” she exclaimed one evening.

“But you told me I should try to change the church,” he responded.

“Jim,” she said, “I meant St. John’s Church in Wellesley, not the Roman Catholic Church!”

Of course not: that would be heresy. For virtually all of its history, the church has been ruled only from above. As recently as April, the Vatican refused to allow Boston’s embattled Cardinal Bernard Law to resign–in part, one high-ranking cardinal admitted, because it didn’t want to appear to be giving in to lawsuits, pressure groups and the despised American media. So last week, when Rome reversed itself and accepted Law’s resignation, tendered with pleas for forgiveness from “all those who have suffered from my shortcomings and mistakes,” the reaction among many Boston Catholics was a kind of stunned awe. “It feels to me like one of those pivotal moments in the history of the church,” a suburban priest exclaimed, comparing the occasion to the Protestant Reformation and the Second Vatican Council. “The situation is so explosive,” said Stephen J. Pope, chair of the theology department of Boston College, “that there is really no historical parallel or protocol within the church.”

Yet there was no jubilation, even in the newsroom of The Boston Globe, which had uncovered some of the most damning evidence of Law’s willingness to overlook assaults on children by his priests. “It’s pretty somber,” said Walter Robinson, who headed the paper’s investigation. “This is one of those stories that doesn’t call for a high-five.” Law’s resignation was “very sad, and very necessary,” said the Rev. Robert Bullock, pastor of Our Lady of Sorrows Church in suburban Sharon, who had been one of the leaders among priests in calling for the resignation. Many victims, like Dan Kiley, who was abused by a Massachusetts priest 40 years ago, found a kind of bittersweet vindication in Law’s resignation, and expressed hope that the wounds, both personal and parochial, might now begin to heal. But one official who didn’t waste many words of sympathy for the outgoing archbishop was, ominously, Massachusetts Attorney General Tom Reilly. While conceding that under Massachusetts law it would be difficult to hold a church superior accountable for the actions of his underlings, Reilly has subpoenaed Law and five other bishops to appear before a grand jury. Speaking of the long history of abuses and cover-ups, Reilly said: “This could have been stopped a long time ago, but it wasn’t.”

The other dominant emotion was sympathy for Bishop Richard Lennon, who inherits the disaster left behind by Law. As “apostolic administrator,” he will run the archdiocese of Boston, with its 362 parishes and more than 2 million Catholics, until a new archbishop is chosen by the pope. (Law will remain the senior American cardinal.) One of Lennon’s first challenges will be to find an estimated $100 million or more to settle as many as 450 claims by alleged victims, or else pursue a risky bankruptcy that would delay and drastically reduce any payments. A bankruptcy filing “will never, never happen,” a well-connected cardinal told NEWSWEEK. The idea of a civil judge’s taking control of the archdiocese’s books is inconceivable to the Vatican, even if that means it ends up paying some of the claims itself. Lennon–a low-key career administrator in the Boston chancery–personally drew praise from those who have worked with him. “He’s very intelligent, very much respected and a very good listener, and we need a lot of listening right now,” said Jim Post, president of Voice of the Faithful.

But if a second Reformation was brewing in the spiritual home of American Catholicism, the Vatican was taking a more measured view. The word in Rome, one top official in the Curia told NEWSWEEK, was that Law had failed to follow the U.S. Conference of Bishops’ directives on handling priests accused of sexual abuse, which called for close supervision and monitoring of their treatment and subsequent activities. The implication is that while individual churchmen might be flawed, the solution, as always, is to follow church policy more closely. Law’s other mistake, in Rome’s view, was to make generous settlements to victims in the early cases–the archdiocese has paid out more than $40 million so far–whetting the appetites of America’s famously litigious citizens. “The situation in the United States now is getting out of control,” a prominent cardinal said. “Many are profiting from the big scandal and following the smell of money.” Finally, the Vatican believes, if a handful of American priests have been careless about their vows, it’s an American problem, rooted in the moral laxity for which the nation is notorious. “How did the bishops control and form their priests?” an-other Curia official demanded. “What kind of theological morality was taught in the American seminaries back in the 1970s?”

Pressure had been building on Law since January, when the Globe broke the story of how Father John Geoghan, who has been accused of molesting at least 86 boys as young as 4 years old, had been shuffled from parish to parish over a period of 30 years. More cases followed, in dioceses all over the country and as far away as Poland and Argentina. Even before last week, four other American bishops had resigned this year over charges related to sexual misconduct. It was widely expected that Law, who is 71, would be allowed to resign after a decent interval. But his position quickly became untenable after Dec. 3, when a Boston judge ordered the release of 2,200 pages of internal church documents whose contents even the archdiocese’s hard-pressed spokeswoman, Donna Morrissey, described as “truly horrendous.” What many Catholics found horrendous wasn’t just the acts described in the files–a priest who beat up his housekeeper, another who exchanged cocaine for sex with a teenager–but Law’s tolerance of the perpetrators. The church papers showed little interest in the victims, but a perverse insistence on treating criminal assaults and sexual aggression as opportunities for spiritual growth–and challenges for the church to avoid “scandal.”

By the end of that week, Law was rapidly losing even the vestiges of his authority. On Thursday he prohibited meetings at Our Lady Help of Christians Church, whose pastor, the Rev. Walter H. Cuenin, had challenged church teachings on core doctrines including homosexuality, the ordination of women and priestly celibacy. A day later about 45 priests defied Law and met at Cuenin’s church to discuss the child-abuse crisis. Bullock, the head of an association called the Priests Forum, drafted a letter calling on Law to step down, and it quickly gathered the names of 58 Boston priests.

This unprecedented act of rebellion surely got the attention of the Vatican, even if many non-Catholics initially missed its significance. The American media, obsessed with priests’ vows of chastity, sometimes forgets that Rome takes their oath of obedience just as seriously. That Sunday, Dec. 8, barely 150 worshippers showed up at Holy Cross Cathedral, but Law, who was scheduled to celebrate Mass, was inexplicably missing. The congregation was vastly outnumbered by the 450 protesters outside, and even more so by the crowd of 850 who packed Cuenin’s suburban church that Sunday to hear the rebel priest denounce the cardinal for “hiding behind lawyers.” In fact, Law was already in Rome, where he dined that evening (on green noodles baked with mozzarella) with Bishop James Harvey, the highest-ranking American on the pope’s staff. After a week of urgent, secretive consultations, Law met with Pope John Paul II to resign the post he had held since 1984. It was a sad ending to what had been, until this year, a distinguished career. The Harvard-educated Law was, like most of John Paul’s appointments, conservative on theology but an activist on social issues and civil rights who had done much to improve relations with Boston’s minority and Jewish communities. “He’s so gifted and so skilled,” says Bullock, “it’s sad to see him caught up in this tragedy.”

And all during this tempestuous year, the group that began with a meeting in a church basement kept quietly adding members from around the world. Muller, Voice of the Faithful’s founder, holds honorary degrees from five Catholic colleges; the antiwar group he helped start won a Nobel Peace Prize, so he brought some moral authority to the issue. The Geoghan revelations were “devastating,” he recalls. “My wife and I, who were devoted Catholics, could not bring ourselves to go to church in January.” And the group has continued to attract devoted Catholics; its very name proclaims it an organization of the “faithful.” It has proceeded with the utmost discretion. The organization called on Law to resign only last Wednesday, by which time it was practically a fait accompli. It has defined its goals modestly in terms of consultation, although even that was hard enough to achieve. It took the group three meetings with canon lawyers and a bishop on Law’s staff before the cardinal himself finally met with them on Nov. 26. Garry Wills, a moderate Catholic intellectual if ever there was one, sees no harm in VOTF’s seeking a voice in church decision making. In other spheres “we don’t accept authority unless it is accountable,” Wills told NEWSWEEK. “The hierarchy thinks it owns the church. It doesn’t.” Could a group like this really pose a threat of revolution, or even reformation?

The Vatican, which views VOTF with grave suspicion, isn’t taking any chances. “They pretend to be with the church, but on the controversies that concern the Catholic Church in America, they are liberals,” one prelate hisses. Though perhaps not by itself, the group has helped galvanize forces that have been building in the church for years. Last week a group of priests from the New York area, calling themselves Voice of the Ordained, asked to be consulted on a choice to replace Bishop Thomas Daily when he retires. (Daily, who was a top administrator under Law, was one of the bishops subpoenaed by Reilly.) And while VOTF scrupulously avoids raising hot-button issues, others, including priests, are more outspoken. One reason bad priests keep getting reassigned is that the church is desperately short of clergy–would recruiting women or married men help solve that problem? Would a hierarchy that included women and parents have been more sensitive toward the victims of abuse? These are questions that keep the hierarchy up at night, says Thomas O’Connor, a church historian at Boston College. “There have been several liberal priests who have acted heroically in taking a stand against the cardinal,” he says. “But if they were to use the scandal to further their own agendas on ordination of women or married priests, it would be immediately divisive.” His warning is echoed in Rome, where Msgr. Bryan Ferme, a canon-law authority, contends that “the liberals are trying to organize their own church out of the Vatican by criticizing the morality of the church.”

The church knows well the power of ideas when fueled by outrage. And its adjustment to liberal, secular democracy is, sometimes, still an ongoing process. In 1899 Pope Leo XIII warned against the heresy of “Americanism,” a movement by a few American bishops who encouraged their flocks to engage actively in political and social causes outside the church. But society has changed quite a bit since then, and parishioners with doctorates won’t be treated, as Muller puts it, “like sheep.” Post, the VOTF president, is a professor of management at Boston University and not one to be intimidated by authority any more than Muller is. “What we’re dealing with,” he says, “is nothing less than the challenge of major institutional change in the way the church operates. There are 64 million Catholics in the United States. We have an awful long way to go.”