The power spectrum estimator based on the discrete wavelet transform (DWT) for 3-dimensional samples has been studied. The DWT estimator for multi-dimensional samples provides two types of spectra with respect to diagonal and off-diagonal modes, which are very flexible to deal with configuration-related problems in the power spectrum detection. With simulation samples and mock catalogues of the Las Campanas redshift survey (LCRS), we show (1) the slice-like geometry of the LCRS doesnt affect the off-diagonal power spectrum with ``slice-like mode; (2) the Poisson sampling with the LCRS selection function doesnt cause more than 1-$sigma$ error in the DWT power spectrum; and (3) the powers of peculiar velocity fluctuations, which cause the redshift distortion, are approximately scale-independent. These results insure that the uncertainties of the power spectrum measurement are under control. The scatter of the DWT power spectra of the six strips of the LCRS survey is found to be rather small. It is less than 1-$sigma$ of the cosmic variance of mock samples in the wavenumber range $0.1 < k < 2$ h Mpc$^{-1}$. To fit the detected LCRS diagonal DWT power spectrum with CDM models, we find that the best-fitting redshift distortion parameter $beta$ is about the same as that obtained from the Fourier power spectrum. The velocity dispersions $sigma_v$ for SCDM and $Lambda$CDM models are also consistent with other $sigma_v$ detections with the LCRS. A systematic difference between the best-fitting parameters of diagonal and off-diagonal power spectra has been significantly measured. This indicates that the off-diagonal power spectra are capable of providing information about the power spectrum of galaxy velocity field.