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Mayor Ray Nagin said several bodies were seen floating in the Bywater and Eastover neighborhoods. An estimated 40,000 homes were flooded in St. Bernard Parish east of the city.
Red Cross shelters were filled in Mississippi. In Alabama, residents of coastal and low-lying areas were told to evacuate. Waves from Mobile Bay swamped downtown Mobile, Ala., with up to 11 feet of water, and at least two deaths from a highway wreck attributed to the weather were reported. Three nursing home patients in New Orleans died, apparently as a result of stress, as they were being evacuated. Elsewhere, officials said it was too early to state casualty numbers.
Buildings crumbled in Hattiesburg, Miss., about 90 miles north of New Orleans. In Biloxi, Miss., emergency management officials said Gulfport Memorial Hospital had suffered major damage.
Some casinos along Highway 90 were flooded, and the interstate was littered with boats and other debris. The Jackson County Emergency Management Agency relocated to the courthouse after the roof came off its building in Pascagoula, Miss.
Fatalities feared, unknown
Mississippi Gov. Haley Barbour said the storm hit "like a ton of bricks," and he feared there could be "a lot of dead people" found along the coast once emergency workers were able to assess the situation.
"This is a devastating hit," said Gulfport Fire Chief Pat Sullivan. "What you're looking at is Camille II."
There was no indication when people would be able to return to their homes.
That could be awhile. Forecasters said Katrina, which was downgraded to a tropical storm last night, could spawn tornadoes as it crept northward and would bring heavy rains to the Tennessee Valley, the Ohio Valley and Great Lakes regions.
Bush administration officials said he was expected to use part of the country's 700 million barrels of emergency petroleum stockpiles to offset possible shortages caused by the storm.
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In Wiggins, Miss., a hill community 20 miles north of Gulfport, Olene Walters, 56, one of the town's holdouts, ventured out into the winds and returned in shock.
The storm had stripped the roof off her beauty parlor and pulverized the Lake-A-Way RV Campgrounds she owns five miles outside of town.