The New Orleans Times-Picayune
just reported that a large section of a levee near Lake Pontchartrain gave way late Monday morning flooding the surrounding area. They also report that water levels in the area were still rising this evening.
A few minutes ago (1:40 AM CT) CNN had a caller on-air from the Tulane University Hospital who reported that water levels were rapidly rising there to the point that emergency vehicles could no longer reach the hospital and that they were preparing to evacuate. The only method left for them to evacuate is via helicopter. The hospital is in the central business district, a few blocks from the Superdome and not far from the French Quarter.
As has already been reported numerous times, the city of New Orleans is shaped much like a bowl and is kept dry with many massive pumps. Apparently the pumps aren't working or are being overwhelmed by the levee breach. Perhaps the early reports that New Orleans has dodged complete ruin were premature.