So the State was actually right to want to control the remodeling??
http://www.freerepublic.com/focus/f-news/1477595/posts
They have the right. It's their state. But they have to live with the choices they make. What Bush offered to Blanco was that if she gave up the right to direct the recovery efort, the feds would (direct the recovery effort). She turned that down.
Right now, the state of Louisiana is in control of the orders given to NG and other police entites. It is nominally in charge of search and rescue, but as a practical matter active military has complete control of that.