The killer storm inflicted widespread catastrophic damage along the coast as it slammed into Louisiana on Monday with 140 mile per hour (224 kph), winds, then swept across Mississippi, Alabama and western Florida.
Throughout the region, shattered buildings sat among flooded streets and fields, broken boats and cars lay strewn about the landscape with debris and uprooted trees were everywhere.
Officials told Mississippi newspapers that at least 80 people were known dead in that state.
Harrison County Emergency Management spokesman, Jim Pollard, told the Jackson, Mississippi, Clarion Ledger that 30 of them died at a Biloxi apartment complex where they were drowned or crushed by debris.
Most of the deaths appear to have been caused by a massive storm surge that swept in from the sea and as far as a mile (1.5 km) inland in parts of Mississippi.
Others died, officials said, from falling trees and weather-related car wrecks.
“The state has suffered a grievous blow on the coast,” Mississippi Governor Haley Barbour, said.
In many areas, rescuers struggled to reach potential victims because of high waters or mountains of debris. In New Orleans, police said many people escaped rising waters by climbing into their attics or up on their roofs.
Police said they were using boats to go into flood stricken areas to get those trapped in their homes. Some were plucked from roofs by helicopter.
People used axes and in at least one case, a shot gun to blast holes in roofs so they could escape their attics. Many who had not yet been rescued could be heard screaming for help, they said.
“This is a horror story. I’d rather be reading it somewhere else than living it,” said Aaron Broussard, president of Jefferson parish which includes parts of the New Orleans area and goes south to Grand Isle on the coast.
He said that because of the devastation there, residents would not be allowed back to their homes until Monday, and then only long enough to pick up essential items.
As Katrina roared through the gulf, it was feared that New Orleans, most of which lies below sea level and is protected by levees, would be devastated by floods.
But the storm veered east at the last moment, striking the outlying parishes hard and damaging, but not devastating the city’s historic center.
Katrina’s winds shattered high-rise windows, littered the streets of the historic French quarter with debris and tore through the roof of the Superdome football stadium where 10,000 people had taken shelter.
There was only minor flooding in the city center as Katrina passed by but there were new concerns on Tuesday about high waters.
Tulane University Medical Centre vice president, Karen Troyer-Caraway, told CNN that waters were rising in downtown New Orleans because a nearby levee holding back Lake Pontchartrain had suffered a two-block long breach.
“We are now completely surrounded by six feet (two metres), of water and we’re getting ready to get on the phone with FEMA (Federal Emergency Management Agency), to start talking about evacuation plans,” she said. The hospital has over 1,000 patients.
“The water is rising so fast I cannot begin to describe how quickly it’s rising,” she said. “We have whitecaps on Canal Street, the water is moving so fast.”
Katrina knocked out electricity to about 1.3 million people in Louisiana, Mississippi, Alabama and Florida, utility companies said.
On its way to the coast, the storm swept through oil and gas fields in the Gulf of Mexico where 20 percent of the nation’s energy is produced.
At least two drilling rigs were knocked adrift in the gulf and another in Mobile Bay, Alabama, broke free of its mooring and slammed into a bridge.
U.S. oil prices on Monday jumped nearly $5 a barrel in opening trade to peak over $70 before settling back to around $67 on Tuesday.
Risk analysts said the storm could cost insurers up to $26 billion which would make it the most expensive storm in U.S. history.
By Tuesday morning, Katrin, had moved inland to northeastern Mississippi where the National Hurricane Center in Miami said it was downgraded to a tropical storm with 60 mph (96 kph) winds.