The erratic storm has dumped more than two feet of rain along parts of Florida's low-lying central Atlantic coast.
It is just the fourth storm to make landfall in Florida with such strength three separate times, and the first in nearly 50 years. Before it eases across the Panhandle by the weekend, it could bring buckets rain.
Two people drowned in heavy surf Thursday as the storm came ashore in Flagler Beach, nudging Fay's total death toll to 25 after Haiti discovered three more bodies. The drownings were the first United States deaths directly caused by the storm.
In Melbourne, evacuations continued as water levels reached five feet in some neighborhoods, reports CBS' The Early Show weather anchor Dave Price.
"We've got water up almost to the mailboxes," one resident said.
A swamp buggy typically used by the Florida Fish and Wildlife Commission to navigate the deep waters of swampland has been recommissioned to try and navigate the waters of the community, Price reports. Streets that were once used to get to the store have become staging grounds for the National Guard.
President Bush issued a federal disaster declaration Thursday for the affected parts of Florida, as hundreds of residents fled floodwaters that drove alligators and snakes out of their habitats and into streets.
Susan and Gary Redwine of Merritt Island, near Cape Canaveral, got sick of sitting inside for three days and decided to hop onto their kayaks for a cruise through the neighborhood.
"It's the only dry way to get around. It's not like you can go jogging or anything," said 49-year-old Gary Redwine.
Emergency officials planned to begin surveying damage along the coast Friday as the floodwaters were expected to slowly recede.
The storm first made landfall in the Florida Keys earlier this week, then headed out over open water again before hitting a second time near Naples. It then advanced slowly across the state, popped back out into the Atlantic Ocean and struck again.
Flooding was especially acute along Florida's Atlantic coast from Port St. Lucie to Cape Canaveral, with water reaching depths of 5 feet and more in some neighborhoods.
"This is the worst I've absolutely ever seen it," said Mike White, 57, after he was rescued by the National Guard from floodwaters lapping at the doorstep of his mobile home.
At 5 a.m. EDT Friday, the storm's center was located about 65 miles east-northeast of Cedar Key and moving west near 6 mph, according to the National Hurricane Center. Its maximum sustained winds were near 50 mph and it was forecast to gradually weaken.
Isolated tornadoes were possible in parts of northeastern Florida, southeastern Georgia and southern South Carolina, the hurricane center said.
In Neptune Beach on Thursday, police said an Indiana tourist drowned after going swimming in a rough ocean churned up by the storm. To the south in Volusia County, authorities said Fatmira Krkuti, 35, of Brooklyn, N.Y., also drowned in Fay-generated waves.
In some flooded areas, residents were warned to keep watch for alligators, snakes and other wildlife forced from their habitats and swimming in search of dry land. At least two alligators were captured in residential neighborhoods and several others spotted.
"This storm has been hanging around and hanging around and hanging around," said Florida Gov. Charlie Crist, who visited the region Thursday. "And she's going to be around for a while longer.
"We'll get through this," Crist added. "This too shall pass."
Brevard County officials gave a preliminary damage estimate of $12 million in Melbourne, mostly from flooding, and $2.6 million from beach erosion.
The outer bands of Fay continued to pour sporadic rains Thursday along the 100-mile Georgia coast, with some areas reporting winds of 20 to 30 mph. The National Weather Service said southern Georgia could see some flooding from 5 to 10 inches of rain as the storm moved west through northern Florida.
A tropical storm watch was posted for the Gulf coast of Florida from the Suwannee River to Indian Pass, in case the storm emerges over water again.