Just heard the levies were set to withstand Cat 3 storms not Cat 5.
According to the Mayor and the weatherman on WWL-TV, the levees were only 15 feet high when they were built, and have since settled to about 13 ft high. And they're just earthen levees. Debris - boats, pieces of structures - carried by the storm surge and waves will just punch holes into the levees. The city pumps water out to Lake Pontchartrain, but the hurricane winds will force water from the lake back into the city.
From http://www.weather.com/newscenter/specialreports/hurricanes/vulnerablecities/neworleans.html
"The levees that protect the city from flooding are also a flood threat themselves. "The biggest threat that the city has is that of a slow moving Category 3, 4 or 5 hurricane, which would create a surge of water that could be up to 30 feet high. Now if this (high) water comes into the city, it will top the levees. It will go over the top of the levees and actually fill up the city," "