NOAA has now stated that storm surge could top New Orleans' levees with a Category 2 storm or higher. From courant.com:
While the forecast uses what officials say is the most accurate and complete picture yet of the region's levee heights, they said they weren't surprised by findings that reaffirm the area surrounding New Orleans is among the nation's most hurricane-vulnerable. The forecast released Monday represents the first time the yearly storm surge predictions have used levee heights based on global positioning system technology.
The article also states that these estimates do not account for potential engineering failures. These types of failures were a major contributer to post-Katrina flooding. I am curious how much flooding would occur from a levee failure or storm surge over topping. Is there a chance for flooding like we observed after Katrina?