Isaac, a slow-moving Category 1 hurricane when it hit the region on Tuesday, was expected to weaken into a tropical depression on Thursday.

But it left a soggy mess across a widespread area and could still bring heavy rain and floods as it moves over the central United States - where rain is badly needed - in the next few days.

More than 730,000 residents of Louisiana and Mississippi were without power.

Oil production in the U.S. Gulf of Mexico was expected to start ramping up again, after nearly grinding to a halt as Isaac closed in on Louisiana on Tuesday. Most energy facilities, including key coastal refineries, seemed to escape any Isaac-related damage although benchmark Brent crude was trading slightly higher on Thursday at about $113.25 a barrel.

Multibillion-dollar defenses built to protect New Orleans itself, after it was ravaged by Katrina almost exactly seven years ago, passed their first major test, according to the U.S. Army Corps of Engineers.

But massive rains and storm surge from the Gulf of Mexico inundated low-lying communities outside the federal flood containment system protecting the city, forcing the evacuation of thousands of people from their homes and dramatic rooftop rescue operations.

The hardest hit area was Plaquemines Parish, southeast of New Orleans, where floodwaters overtopped at least one levee on Wednesday and left many homes under about 12 feet (3.6 meters) of water.

Dozens were plucked from the roofs of their houses in Plaquemines by local boatmen after earlier deciding they could ride out what compared with Katrina seemed like a small storm.

Parish President Billy Nungesser said U.S. Army National Guard troops and local sheriff's office officials were going house to house through the area on Thursday to ensure that there were no deaths or injuries.

Clearing weather was permitted the use of military helicopters, mostly UH-60 Blackhawks, to aid in the operation.

In St. John the Baptist Parish, northwest of the city, about 3,000 people were forced to evacuate their homes before dawn on Thursday due to storm surges from Lake Pontchartrain and Lake Maurepas, authorities said.

Local media also reported major flooding in the town of Slidell, northeast of New Orleans.

"We've been working all through the night. We'll continue working all day," Lieutenant Colonel Mike Kazmierzak of the Louisiana National Guard told CNN.

"IT WAS SCARY"

Staff Sergeant Denis Ricou, a Louisiana National Guard spokesman, said about 5,800 troops had been deployed due to Isaac and the number could rise to over 8,000 in the coming days.

City officials announced a dusk-to-dawn curfew on Wednesday to help prevent any return of the looting that occurred in New Orleans in the days after Katrina struck in 2005.

New Orleans Mayor Mitch Landrieu warned that the punishment for a looting conviction is harsh - a mandatory three years' hard labor.

"If you loot, you'll wear an orange suit," Landrieu told a news conference.

About a dozen looting-related arrests were reported in the city by Thursday morning but the streets were unusually quiet, littered with downed branches, trees and pieces of roofing material.

Power remained out through most of the city, while in the historic French Quarter, a few people were out taking down the boards they had nailed up over store windows.

Mark Wallace, 52, had come out to check on his store, Fancy Boutique.

"This one just took forever," Wallace said of the slow-moving storm, which has brought rain to New Orleans since late Tuesday. "Usually they blow through and are done with."

Wayne Overton, 50, a longshoreman, had come out to inspect a large, fallen tree in front of his home that had knocked down power lines.

"This one lasted a while. It was scary," Overton said, noting that the storm had damaged the roof of his home, near the city's port. "There's going to be a lot of clean up to do around here."

As the focus on Isaac shifted from the coast, many in its projected path further north have been praying that it will bring rain desperately needed to ease a drought in the central states, where summer crops are drying up and many rivers and dams are critically low.

Isaac never came close to the power of Katrina, which was a Category 3 hurricane on the five-step Saffir-Simpson scale when it smashed into New Orleans on August 29, 2005.

But U.S. President Barack Obama still declared the impact on Louisiana and Mississippi major disasters and ordered federal aid to supplement state and local recovery efforts.

City officials also said Louis Armstrong New Orleans International Airport, which closed late on Monday, would remain shut on Thursday until repairs can be done to the damaged lines that supply it with power.

A tow-truck driver died early Thursday after a tree fell on his cab while he was trying to move a large tree from a main street in Picayune, a town in Pearl River County in southern Mississippi near the Louisiana border, according a spokesperson for the Pearl River Emergency Management Agency.

Together with an unconfirmed death in a Louisiana apartment fire, it was the only fatality blamed on Isaac so far.

(Additional reporting by Ben Gruber and Kathy Finn in New Orleans, Emily Le Coz in Tupelo, Missisippi, Chris Baltimore in Houston, David Adams in Miami; Writing by Tom Brown and Andrew Heavens; Editing by Jackie Frank)

• A Permanent Economic Emergency