* Early damage reports say 346 homes lost in blaze
* Colorado's Waldo Canyon fire only 5 percent contained (Updates with preliminary property loss figures)
By Keith Coffman
COLORADO SPRINGS, Colo., June 28 (Reuters) - A fierce Colorado wildfire that has forced the evacuation of some 35,000 people while raging for six days at the edge of the state's second-most populous city has destroyed 346 homes, Mayor Steve Bach said on Thursday, citing preliminary damage reports.
If those figures hold up, the tally of lost homes in and around Colorado Springs would make the so-called Waldo Canyon Fire the state's most destructive on record, surpassing the 257 homes consumed in recent weeks by a much larger blaze north of Denver near Fort Collins.
Authorities earlier acknowledged the loss of hundreds of homes in Tuesday's firestorm, but the damage toll released by the mayor at an afternoon news conference on Thursday gave the first firm picture of the full extent of the devastation.
The grim news came as lighter winds helped firefighters battling to contain the inferno that had roared unchecked through residential neighborhoods in the northwestern corner of Colorado Springs and nibbled at the fringe of the U.S. Air Force Academy campus.
For the first time since the blaze erupted on Saturday, a red-flag warning for heightened fire hazards was lifted for the Colorado Springs area.
"It definitely increases their (firefighters') morale because it means they can work safer, it means that they can most likely get more done today," said fire information officer Rob Deyerberg.
As of Thursday, however, the Waldo Canyon blaze remained mostly untamed, with fire crews managing to carve containment lines around just 5 percent of its perimeter, officials said.
Searing temperatures and strong, erratic winds in recent days stoked the blaze, which has burned at least 18,500 acres (7,487 hectares) of timber and brush, much of it in the Pike National Forest to the west of the city that lies at the base of the famed Pikes Peak mountaintop.
Firefighters on Wednesday pushed back a spot fire in a vacant corner of the Air Force Academy, but some residential neighborhoods in and around Colorado Springs were harder hit.
"There was nothing left in some areas, burned-out foundations that were smoldering. It looked like a nuclear weapon had been dropped. It's as close to hell as I could imagine," said Bachafter touring the heavily damaged Mountain Shadows subdivision.
Colorado wildfires have killed four people this year in what the governor called "the worst fire season" in state history. No injuries from the Waldo Canyon fire have been reported.
"Yesterday was a good day, and firefighters have made progress," incident commander Rich Harvey told a news briefing. "Now we're going to go after it aggressively."
More than 1,200 personnel, supported by heavy air tankers and helicopters, are assigned to the blaze, Harvey said.
Despite the blaze, the Air Force Academy welcomed over 1,000 new cadets, taking them to a part of the facility far from the smoke, said Academy spokesman Harry Lundy said.
President Barack Obama plans to visit the Colorado Springs area on Friday to meet with firefighters and tour the ravaged zones. (Additional reporting by Ellen Miller; Writing by Alex Dobuzinskis; Editing by Tim Gaynor and Christopher Wilson)