Back to Nepal after far too many months away and the first thing I notice is the utter mess that is Kathmandu. Jaded Valley dwellers say the city has long been a chaotic miasma but it's now far worse.

When I first started coming here in 1997, there was a mayor and ward chairmen and party politics to press for change. Now an arrogant CDO with no qualifications to run a city and no accountability passes his days summoning newspaper editors over slights to the inhabitants of a palace. Ordinary people might have held out some hope that the king's coup would change their lives for the better. Now, they see the reality.

The media is abuzz with a cack-handed quasi-government's attempt to stifle even the mild dissent that has appeared since 1 February. Some of the media anyway. Kantipur's plight is viewed sympathetically in fewer and fewer newspapers these days although the country's main media house is freedom's standard-bearer right now. Kathmandu's international community is aghast. What the hell is going on in Shangri La, they ask each other. Diplomats work feverishly to find solutions to this country's dire plight. Some want to save the monarchy. Others think the Maoists need to be crushed first. A few see a democratic republic with parties of left and right debating the issues in parliament. In the countryside, the revolution continues unchecked.

Independent, informed military analysts are gloomy. They see Nepal's people caught between an army that has only ever believed in feudalism and insurgents who follow an insane ideology that has killed hundreds of millions around the world. Even during democracy, the Royal Nepali Army officers would tell any foreigner who would listen that they only defended "king and country, in that order". In four years time, a force that was largely ceremonial and had no military experience whatsoever has doubled in size and become a source of fear and grief for the rural peasantry, the urban intellectual. Until recently, the Maoists targeted the same people.

The privileged elite party on. But the hands that clutch napkin-wrapped glasses tremble at the thought of how badly things are going. These comfortable folk with familiar surnames and far too much influence, were foursquare in favor of usurping what was left of democracy. They told themselves that a free press and human rights NGOs were all that stopped the RNA from crushing Maoism. The dismal record of the security forces belie that claim. History tells us that absolute monarchies do not work. Period.

It's easy to despair, to give up, or flee. But losing hope would be wrong. Instead, I wonder if Nepalis and their international friends don't now need to think beyond long-held nostrums, to forge a future path that is creative, flexible and humane. It's time to start talking about so many unmentionables. Caste springs to mind. So does the role of feudalism in undermining democratic political parties. The national identity of Nepal needs to be re-invented and broadened beyond tales of a conqueror who captured Kathmandu nearly 300 years ago. Nowadays, nations are proud of their current achievements, not of a past so distant that it's often confused with myth. And those achievements involve empowerment and prosperity, not centuries-old military victories.

The immense opportunity of having huge, booming neighbours needs to be emphasized, and the defeatism implicit in being a yam between two boulders discarded. A young urban elite is springing up that has global awareness and many talents. They need to be allowed into politics, business and public life.

Finally, Nepal needs to realize that it's a member of the community of nations with many shared experiences and much to learn and contribute. Exceptionalism has not served this country well. Having the most number of disappeared citizens and one of the world's worst economies is no way to stand out from the rest.

A lack of imagination is all that's preventing Nepal from moving out of crisis and into hope.