Holy smokes - I was flipping between Fox and MSNBC this evening, and both networks had interviews with a spokesman from the Army Corps of Engineers. It doesn't sound good. While the water level in New Orleans is no longer rising, that's only because the water has reached its natural level. Apparently, they just found more breaches in the flood walls that they weren't aware of, and they've not been successful in their attempts to block them. Why? They aren't accessible by land or water, and they can only do so much from the air.
It gets worse. Even once they get the holes plugged, they then have to drain the city. The spokesman said that would be a 3-6 month job. So what we have is a nearly unprecedented situation in the US - hundreds of thousands of refugees who won't be able to return home for months. Many of them may not ever get home. Consider the buildings in flooded New Orleans. First, there's whatever wind damage they took during the storm. Add in a few months of being marinated in semi-toxic water. What do you end up with? A whole lot of buildings that need to be condemned and demolished, that's what.
Things are going to stay bad for New Orleans for a long, long time.