Hurricane Rita (search) ripped its way onshore early Saturday morning as a Category 3 storm, pounding communities along the Texas-Louisiana border coastline with high winds and heavy rain. The worst was potentially yet to come however, as the National Hurricane Center (search) warned that the storm could additionally flood the coast with a 20-foot tidal surge.

In the immediate vicinity of the storm's landfall, reports of its impacts trickled in almost immediately. Windows blew out in the lobby of a hotel in Beaumont, Texas, near where the storm made landfall, and shards of glass and pieces of trees were strewn throughout the flooding lobby, KHOU-TV reported. And according to reports as many as 500,000 residents were without power along the Texas coast.

Elsewhere, there were numerous other accounts of damage to structures, including a highway overpass in southwestern Louisiana.

The powerful hurricane's impacts were felt even prior to its official 3:38 a.m. EDT landfall, as the storm wreaked havoc across the region in the hours ahead of its arrival onshore.

Levee breaks caused new flooding in New Orleans (search), and as many as 24 people were killed when a bus carrying nursing-home evacuees caught fire in a traffic jam.

In Galveston, Texas, three buildings in the historic district burned after an electric pole apparently fell and the resulting fire was whipped up by impending Rita's blustery winds.

Rita weakened during the day on Friday into a Category 3 hurricane with 120-mph winds after raging as a Category 5, 175-mph monster earlier in the week. The storm wobbled slightly as it approached the coastline, jogging slightly to the east, and officials were relieved that it would apparently spare Houston and Galveston the worst of the hurricane's impacts.

"It looks like the Houston and Galveston area has really lucked out," said Max Mayfield (search), director of the hurricane center.

Nevertheless, smaller towns like the oil-refining communities of Beaumont and Port Arthur, Texas, and Lake Charles, La., were set to bear the storm's wrath with a 20-foot storm surge, towering waves and up to 25 inches of rain predicted.

"That's where people are going to die," said Max Mayfield, director of the National Hurricane Center (search). "All these areas are just going to get absolutely clobbered by the storm surge."

There was some good news however, as officials estimated that as many of 90 percent of residents in some impacted counties, such as Jefferson County, had evacuated, perhaps mindful of Hurricane Katrina's (search) devastating impacts just weeks ago.

Nevertheless, the storm's relatively slow progress and the possibility that it might stall inland raised worries that it could pour two feet of rain on parts of Texas and Louisiana, which would likely spur flooding.

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Late Friday, southwestern Louisiana was soaked by driving rain and coastal flooding. Sugarcane fields, ranches and marshlands were already under water at dusk in coastal Cameron Parish.

The sparsely populated region was almost completely evacuated, but authorities rushed to the aid of a man who had decided to ride out the storm in a house near the Gulf of Mexico after one of man's friends called for help.

They were turned back by flooded roads.

"He's going to take the full brunt of this hurricane coming in," sheriff's Capt. James Hines said.

Police rescued four people huddled under an overhang outside the locked downtown civic center. "There's probably going to be 4 feet of water where they are now," Hines said. "So they need to get out of there."

Empty coastal highways and small towns were blasted with wind-swept rain. A metal hurricane evacuation route sign along one road wagged violently in the wind, and clumps of cattle huddled in fields.

Steve Rinard, a National Weather Service (search) meteorologist in Lake Charles, said he could not keep count of the tornado warnings across southern Louisiana. "They were just popping up like firecrackers," he said.

Rita threatened dozens of shuttered refineries and chemical plants along the Texas and Louisiana Gulf Coast that represent a quarter of the nation's oil refining capacity. Environmentalists warned of the risk of a toxic spill, and business analysts said Rita could cause already-high gasoline prices to rise to as much as $4 a gallon.

In the storm's cross-hairs were the marshy towns along the Louisiana line: Port Arthur, a city of about 58,000 where the main industries include oil, shrimping and crawfishing; and Beaumont, a port city of about 114,000 that was the birthplace of the modern oil industry. It was in Beaumont that the Spindletop well erupted in a 100-foot gusher in 1901 and gave rise to such giants as Gulf, Humble and Texaco.

Kandy Huffman had no way to leave, and she pushed her broken-down car down the street to her home with plans to ride out the storm in an otherwise-deserted Port Arthur, where the streetlights were turned off and stores were boarded up.

"This isn't my first rodeo. All you can do is pray for best," she said as a driving rain started to fall. "We're surrounded by the people we love. Even if we have to all cuddle up, we know where everybody is."

In New Orleans, which had just drained nearly all the putrid floodwaters from Katrina (search), Rita's wind and rain sent water gushing through a patched levee along the Industrial Canal and into the already-devastated Lower Ninth Ward and parts of neighboring St. Bernard Parish. The water rose to waist level.

About the same time, water streamed through another levee along the patched London Avenue Canal, swamping homes in the Gentilly neighborhood with 6 to 8 inches of water.

"Our worst fears came true," said Maj. Barry Guidry, a National Guardsman on duty at the broken levee in the Ninth Ward.

Refugees from the misery-stricken neighborhood learned of the crisis with despair.

"It's like looking at a murder," Quentrell Jefferson said as he watched the news at a church in Lafayette, 125 miles west of New Orleans. "The first time is bad. After that, you numb up."

President Bush, mindful of criticism the federal government was slow to respond to Katrina, had planned to visit his home state to review the Rita response but canceled at the last minute to avoid slowing down the preparations. He planned to watch over the storm from the U.S. Northern Command in Colorado Springs.

At least 2.8 million people fled a 500-mile stretch of the Louisiana-Texas coastline in a seemingly all-at-once evacuation that caused monumental traffic jams in which hundreds of cars broke down or ran out of gas. By midday Friday, the bumper-to-bumper traffic had cleared from the outskirts of Houston toward Austin and Dallas.

In a traffic jam on Interstate 45 near Wilmer, southeast of Dallas, a bus caught fire, killing as many as 24 people. Early indications were that mechanical problems caused the fire, and then passengers' oxygen tanks started exploding in rapid succession.

At 8 p.m. EDT, Rita was centered about 85 miles southeast of Sabine Pass (search) along the coast at the Texas-Louisiana border, moving northwest at near 13 mph, and forecasters said it could weaken further become coming ashore.

The military sent cargo planes to evacuate hundreds of medical patients and others from Beaumont. Downtown Beaumont was all but deserted, with buildings boarded up and practically nothing moving but windblown plastic bags. On the horizon, covered in gray clouds, refinery torches belched black smoke.

Sherry Gates, whose husband is maintenance director of the Beaumont Hotel, planned to stay behind to protect the place from looters. The hotel, she said, can withstand whatever Rita brings. "This old girl," she said, "will see us out."

About 90 percent of Galveston's 58,000 residents had cleared out, with the rest left to the mercy of a 17-foot seawall that was built after a 1900 hurricane that killed 6,000 to 12,000 of the island's residents in what is still the deadliest natural disaster in U.S. history.

"I'd rather die in my house than on the street," Linda Rieffannacht said as Rita's outer bands began pushing waves onto the seawall. "This way they will know where I am."

In southwestern Louisiana, which was on the vulnerable east side of Rita and expected to get the brunt of a 20-foot storm surge, water was already lapping over roads in coastal Lafourche and Terrebonne parishes by midday. High winds flattened sugar cane fields, knocked over old live oaks and lashed the low-lying landscape with driving winds.

In Lake Charles, home to the nation's 12th-largest seaport and refineries run by ConocoPhillips (search), ExxonMobil (search), Citgo (search) and Shell (search), nearly all 70,000 residents had evacuated. Several riverboat casinos that mostly serve tourists from Texas also closed ahead of the storm.

"We see these storms a little differently after Katrina," said city administrator Paul Rainwater. "We all realize that no matter how safe you feel ... you have to take it seriously, you have to plan."

Louisiana Gov. Kathleen Blanco said over 90 percent of residents in southwestern parishes, about 150,000 people, had evacuated. For those who had not, she issued a warning: "You need to find a safe place to be. It is not safe to find yourself stranded on the highway. Get to the highest ground or the highest building in your area."

Some residents of southwest Louisiana were headed to a shelter in Lafayette, joining evacuees from Hurricane Katrina who had been there nearly a month.

"I am thankful for my life and that we are all safe," said Blanche Edgarson, 53, of Plaquemines Parish, an area that was devastated by Katrina. "But I'm very depressed, and I don't know where we will go from here."

Because of the approaching storm, authorities called off the search for bodies from Katrina, and the death toll across the Gulf Coast stood at 1,079, including 841 in Louisiana.

With Katrina's missteps in mind, the federal response for Rita included the placing of disaster response teams in Houston, helicopters in Florida and a fleet of C-5 transport planes in San Antonio for evacuation duty. Five Navy ships, including two amphibious vessels with 800 Marines, were in the gulf awaiting orders.

FOX News' Rick Leventhal and Alexander B. Duncan and the Associated Press contributed to this report.