The Oct. 2004 National Geographic had a very good article, "The Big Uneasy", about what could happen to New Orleans if a Catagory Five hit it. Worth a read if you, like me, have stacks of old National Geographics lying around.
One of the big threats was as the eye passed it first pushed water into Lake Pontchartrin and then as the eye moved north the wind over the lake shifted to the south pushing the water over the levees flooding the city.
Hopefully it has weakened enough that at flooding over those levees won't be as bad as was feared. Seems just a little too early to tell.