| Outlying areas of New Orleans suffered flooding as winds drove a tidal surge over levees and onto roads [AFP]
Tropical Storm Lee has weakened to a tropical depression as it nears Mississippi, but forecasters say it still has the potential to dump up to 25cms of rain over the Tennessee Valley and southern Appalachian Mountains.
The National Hurricane Center said the remnants of Lee were 90km west-southwest of McComb, Mississippi, with maximum sustained winds of 55kph around 11pm EDT (0300 GMT on Monday).
The storm, which has led to a temporary shutdown of over 60 per cent of offshore oil production, was moving east-northeast at 11kph.
New Orleans, drenched as the storm made landfall, managed to hold up, with its flood defences coming under one of their biggest tests since Hurricane Katrina devastated the city in 2005.
Eighty per cent of the city was flooded then and the hurricane - which caused more than $80 billion in damage to New Orleans' tourism industry - killed at least 1,500 people.
Some street flooding was reported in areas of New Orleans, which lies below sea level and is protected by a system of levees and flood gates. The city's massive pumping system kept ahead of the volume and diverted the waters into Lake Pontchartrain.
Low-lying parishes around the city did not fare as well, as Lee's winds drove a tidal surge over levees and onto roads.
"For a while we got some false hope that we might be out of the woods, but we realised overnight we would get more rain," Brennan Matherne, a Lafourche Parish spokesman, said. "We're getting call after call about street flooding."
Mitch Landrieu, the mayor of New Orleans, warned residents to stay alert for flash floods and high winds expected before Lee departs.
"Let's not be lulled to sleep by the breaks that we've had," Landrieu said.
The remnants of Lee could still bring flash flooding and tornadoes to Mississippi on Monday, and to Alabama and Tennessee on Tuesday, the Miami-based hurricane centre said.
There were isolated reports of flooding in roads and homes. No injuries or deaths were reported in Louisiana.
But wet conditions associated with the storm appeared to be a factor in an early morning car accident in Mobile, Alabama, that killed one man and left several injured.