"Our worst fears came true," said Maj. Barry Guidry of the Georgia National Guard.
"We have three significant breaches in the levee and the water is rising rapidly," he said. "At daybreak I found substantial breaks and they've grown larger."
Dozens of blocks in the Ninth Ward were under water as a waterfall at least 30 feet wide poured over and through a dike that had been used to patch breaks in the Industrial Canal levee. On the street that runs parallel to the canal, the water ran waist-deep and was rising fast. Guidry said water was rising about three inches a minute.
The impoverished neighborhood was one of the areas of the city hit hardest by Katrina's floodwaters and finally had been pumped dry before Hurricane Rita struck.
Throughout Friday morning, water began rising again onto buckled homes, piles of rubble and mud-caked cars that Katrina had covered with up to 20 feet of water.
Sally Forman, an aide to Mayor Ray Nagin, said officials knew the levees were compromised, but they believe that the Ninth Ward is cleared of residents.
"I wouldn't imagine there's one person down there," Forman said.
Due to constant warnings from public officials and media, there are only about 500 people left in New Orleans — though many more are in outlying areas — reports CBS News correspondent Sharyn Alfonsi for The Early Show.
As for those who refuse to leave, Gov. Kathleen Blanco advised: "Perhaps they should write their Social Security numbers on their arms with indelible ink."
Mitch Frazier, a spokesman for the Army Corps of Engineers, said contractors were being brought in Friday morning to repair the new damage.
Officials have been working around the clock to patch levees, and a steel curtain has been erected on at least one levee, hoping to withstand the sort of heavy rain that hit the city Friday morning, CBS News correspondent Susan Roberts
Forecasters say anywhere from 3 to 5 inches of rain could fall in New Orleans as Rita passes Friday and Saturday, dangerously close to the 6 inches of rain that Corps officials say the patched levees can withstand.
As Alfonsi reports, some city engineers say it looks like the levees were already leaking as of late Thursday. Even a glancing blow to New Orleans
Another concern is the storm surge accompanying Rita, which could send water rising as much as 3 to 5 feet above high tide.
Already Friday morning, a steady 20 mph wind, with gusts to 35 mph, was blowing, along with steady rains.