If there's a ground zero for the epic drought that's tightening its grip on the South, it's once-mighty Lake Lanier, the Atlanta water source that's now a relative puddle surrounded by acres of dusty red clay.

Tall measuring sticks once covered by a dozen feet of water stand bone dry. "No Diving" signs rise from rocks 25 feet from the water. Crowds of boaters have been replaced by men with metal detectors searching the arid lake bed for lost treasure.

"This lake is a survivor," Jeff "Buddha" Powell told a worried customer at his bait shop along the barren banks.

"If you panic, you don't help Mother Nature," he added. "It's going to rain when it rains."

But little rain is in the forecast, and without it climatologists say the water source for more than 3 million people could run dry in just 90 days.

That dire prediction has some towns considering more drastic measures than mere lawn-watering bans, including mandatory rationing that would penalize homeowners and businesses if they don't reduce water usage.

"We're way beyond limiting outdoor water use. We're talking about indoor water use," said Jeff Knight, an environmental engineer for the college town of Athens, 60 miles northeast of Atlanta, which is preparing a last-ditch rationing program as its reservoir dries up.

"There has to be limits to where government intrudes on someone's life, but we have to impose a penalty on some people," he added. "The problem is how much and who. That gets political. But it's going to hurt everyone. We're all going to share the pain."

About 26 percent of the Southeast is covered by an "exceptional" drought — the National Weather Service's worst drought category. The affected area extends like a dark cloud over most of Tennessee, Alabama and the northern half of Georgia, as well as parts of North and South Carolina, Kentucky and Virginia.

The only spots in the region not suffering from abnormally dry conditions are parts of southern and eastern Florida and southeast Georgia.

Government forecasters say the drought started in parts of Georgia and Alabama in early 2006 and spread quickly. Sweltering temperatures and a drier-than-normal hurricane season contributed to the parched landscape.

Now residents are starting to feel the pinch.

Restaurants are being asked to serve water only at a customer's request, and Gov. Sonny Perdue has called on Georgians to take shorter showers. The state could also impose more limits within the next two weeks, possibly restricting water for commercial and industrial users.

In North Carlina, Gov. Mike Easley stopped short of imposing statewide water rationing but asked people to stop watering lawns and washing cars.

"A bit of mud on the car or patches of brown on the lawn must be a badge of honor," Easley said Monday. "It means you are doing the right thing for your community and our state."

As conditions worsen, the Army Corps of Engineers has become a favorite target of lawmakers in Georgia, Florida and Alabama, where the drought has intensified a decades-old feud involving how the Corps manages water rights.

"I particularly am disappointed that the Corps has allowed so much water to drain out of our reservoirs, out of our lakes, as they have," said Georgia Lt. Gov. Casey Cagle, a Republican. "It's not that we haven't had enough water. It's more a function of allowing so much of it to go downstream."

On Friday, Perdue threatened to take legal action if the Corps continued to let more water out of a north Georgia water basin than it collects. And the president of the Metro Atlanta Chamber of Commerce said on Monday that businesses could also line up behind a legal challenge.

"We have an ongoing water crisis in metro Atlanta. And it is the biggest and most imminent economic threat to our region," said Sam Williams, the chamber's president.

Scientists have little reason to hope the drought will ease anytime soon.

The Southeast Climate Consortium warns that a La Nina weather system is forming, which could bring drier and warmer weather for Florida and most parts of Alabama and Georgia.

"When we need to recharge our water system, this is what we don't want," said state climatologist David Stooksbury, who predicted that it will take months of above-average rainfall to recoup the losses.

In Atlanta, officials are nervously watching the dropping level of Lake Lanier, the sprawling north Georgia reservoir that provides water for 1 in 3 Georgia residents. The latest measurements have become a fixture on nightly television newscasts in Atlanta, where the drought is often the top story.

There is a silver lining of sorts in the middle of the drought: Guides say the lake's fishing is as good as ever, if not better.

"Less water, less places to hide, I guess," said Chuck Biggers, a guide who has roamed the lake's waters for four years.