Residents across south Texas and northern Mexico slogged through knee-deep muddy waters, tiptoed around downed power lines and dug through debris Thursday, but were thankful that Hurricane Dolly did not pack the wallop they had feared.

Downed power lines remained the greatest danger, and officials urged people to stay home one more day "unless it's life or death." One person in Matamoros, Mexico, died after walking past a power line on the ground.

Residents picked up the pieces of their houses and businesses blown apart by the storm. But as dry skies spread over the region, they were struck by relief that the storm did not take many lives. Even so, there will be substantial cleanup: President George Bush declared south Texas a disaster area to release federal funding to 15 counties, and insurance estimators put the losses at $750 million.

Down by the U.S.-Mexico border in Brownsville, the city that expected the worst had some of the least to fear.

Click to view photos of Dolly and affected Texas residents

Residents in the Cameron Park colonia cleared their yards of shingles and tree debris while mosquitoes feasted. But homes were still standing, and residents were thankful the damage wasn't so bad.

"I thought it was going to be worse than it was," Moses Izaguirre said.

A group of Harlingen residents battled a flaming live power line lying on the driveway between two homes. Neighbors rushed to bang on doors and call for people to get out.

"Stay out of the water!" a man yelled at children playing in the muddy mix. But in a sign of returning normalcy, a fire truck arrived minutes after a call to authorities.

Across the Rio Grande in Matamoros, Mexico, power was restored to large parts of Brownsville's sister city, and Tamaulipas Gov. Eugenio Hernandez said the lights would be on by the end of the day.

Gas stations and factories reopened as about 2,500 police and soldiers patrolled to prevent looting while many of the 13,000 people who had taken shelter returned home.

After crashing ashore on South Padre Island midday Wednesday, Dolly shifted north, leaving towns on the northern tip of the Rio Grande Valley with a surprise. Officials had feared the Rio Grande levees would be breached, but the storm veered from its predicted path and they held strong.

The river rose steadily Wednesday in Brownsville, but did not reach flood stage.

"We're not experiencing any issues with the levees right now," Sally Spener, spokeswoman for the International Boundary and Water Commission, said late Wednesday. "The water is just not high enough."

The storm dumped as much as a foot of rain in places and brought 100 mph winds. Those winds had dropped by half Thursday morning, and forecasters canceled the tropical storm warning for the Texas coast by late morning. The storm was expected to break up by Friday, and was centered about 30 miles northwest of Laredo with maximum sustained winds of around 40 mph at 2 p.m. EDT.

Texas Gov. Rick Perry was scheduled to fly over the region with U.S. Sen. John Cornyn Thursday afternoon.

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The community of Laureles had been reduced to a chain of sunken islands, separated from the main roads by floodwaters of two feet or more in places.

Mailboxes barely peaked above murky, wind-swept waters where neighborhood loops met county roads.

More than 5,000 people moved to public shelters in the three hardest-hit counties and the numbers were expected to grow Thursday as more people became stranded by floodwaters.

In Hidalgo County, Pena said there were several incidents late Wednesday requiring emergency personnel to rescue people from homes.

One family was left huddling in their topless house after winds blew the roof off, Pena said. Also, sheriff's deputies rescued a family of eight from Los Fresnos after floodwaters surrounded their home.

The wind knocked a 17-year-old boy from a seventh-story balcony on South Padre Island. The boy suffered a broken hip, leg and a head injury but could not be transported off the island until about 5 p.m. The causeway linking the island to the mainland had reopened.

The last hurricane to hit the United States was the fast-forming Humberto, which came ashore in southeast Texas last September.

The busiest part of the Atlantic hurricane season is usually in August and September. So far this year, there have been four named storms, two of which became hurricanes. Federal forecasters predict a total of 12 to 16 named storms and six to nine hurricanes this season.