The LSU guy who did the studies on how much the city could handle before the levee was breached speculated that the eye of a Cat 5 passing within approx. 30 miles of New Orleans would cause the catastrophic flooding. A bit more on the east side, because the rotation of the winds would drive water north and west into Lake Pontchartrain, then more to the southwest into the spillway west of the city, and the west side levee is apparently the weakest link. It also would eventually drive that water south as the wind came from the north, which might also breach the city's north shore levees.
The worst case scenario is an overtopping of the levee where not only the below sea-level bowl the city is in fills up, but storm surge and waves come in on top of that ending up above the roof of some homes. The next worst case scenario is a levee breach where the bowl fills, but not as deep. If the storm is far enough away that the levee holds against storm surge, then there could be flooding and wind damage, but not as totally devastating and nowhere near the loss of life. As long as the levees hold and aren't overtopped, the pumps should continue to work.
Hence the importance of where the eye path ends up, and why if the path shifts further east to Gulfport, it could make a huge difference.
BTW, the new official forecast track at 10:00 shifted a few miles east again. Of course that is just an estimate, and a pinpoint track doesn't tell the whole story, but it has been slowly trending that way for several updates now.
Interesting links related to history of rivers in area and possible impact of flood events:
The Mississippi Levee System and the Old River Control Structure (ORCS)
http://www.tulane.edu/~bfleury/envirobio/enviroweb/FloodControl.htm
Ecology of the Mississippi River Delta Region
Controlling the Mississippi River
http://www.loyno.edu/lucec/mrdcontrol.html
Floods on the Lower Mississippi: An Historical Economic Overview
http://www.srh.noaa.gov/topics/attach/html/ssd98-9.htm
At what point do you suppose the flood gates will actually start doing more harm keeping the water in that good keeping the water out? Because of the levees and the flood gates, there won't be anywhere for the water to go. The pumps won't work when the electric and gas supply lines are cut . . .