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Isaac's remnants bring headaches but also relief to US drought
* Fading storm still triggers flash floods, tornadoes
* New Orleans flood defenses came through unscathed
* Onshore insured losses seen up to $2 billion
By Ellen Wulfhorst and Scott Malone
NEW ORLEANS, Aug 31 (Reuters) - The remnants of Hurricane Isaac continue to cause headaches on Friday, bringing heavy rainfall and the threat of flash flooding to the lower Mississippi Valley as Gulf Coast residents get ready to start their cleanup efforts.
The first hurricane to hit the United States this year will be remembered for striking New Orleans on the anniversary of 2005's deadly Hurricane Katrina - and providing a first, successful test of the city's pricey new flood defenses.
New Orleans Mayor Mitch Landrieu concluded that the ring of defenses was "operating as designed."
Now a tropical depression, Isaac can still trigger tornadoes in Mississippi and Louisiana, the National Hurricane Center said - among the final acts of a storm that punched above its weight in terms of impact and often confounded forecasters.
One bright spot: rain that is expected to reach the central U.S. Midwest over the weekend, a godsend to farmers suffering from the worst drought in more than 50 years, even if too late for many of this season's crops.
Isaac caused widespread flooding and property damage in the U.S. Gulf Coast region, mostly because of its unexpectedly heavy and persistent rainfall. The system lingered near New Orleans for the best part of two days, sometimes moving as slowly as five miles an hour (8 km per hour).
"Most of them blow through and are over with. This one is just hanging around too long," George Dubaz, a New Orleans tour guide, said during the deluge.
The storm caused anywhere from $700 million to $2 billion in insured onshore losses, disaster modeler AIR Worldwide said late Thursday.
That would still leave Isaac, which came onshore as a Category 1 hurricane, well outside the 10 most costly U.S. hurricanes.
New Orleans' Audubon Park recorded 18.7 inches (47.5 cm) of rain in a 24-hour period during Isaac. That exceeded all records dating back to 1871, said Jeff Masters of Weather Underground. Many other locations in Louisiana and Mississippi logged more than 10 inches (25.4 cm) of rain.
Through it all New Orleans sustained mostly cosmetic damage such as downed trees and street lights. A massive police and National Guard presence - and a dusk-to-dawn curfew, now lifted - also helped keep things calm even as much of the city lost power.
The Port of New Orleans and the city's airport were ready to reopen on Friday, authorities said.
Surrounding areas, though, without the new protective federal flood barriers, did not fare as well from the relentless rain and huge storm surges brought forth by Isaac.
Some of the worst flooding was in Plaquemines Parish, southwest of New Orleans, where flood waters overtopped at least one levee and left many homes under about 12 feet (3.6 meters) of water.
Late on Thursday, local officials confirmed the death of a man and a woman in the parish town of Braithwaite. The pair apparently drowned in their kitchen as flood waters surged in. Earlier, a Mississippi man died after being hit by a falling tree.
Isaac killed at least 23 people in Haiti and the Dominican Republic before taking aim at the United States.
Slidell, a town of about 27,000 people northeast of New Orleans, took the brunt of a storm surge from Lake Pontchartrain, which left some neighborhoods under about a foot (30 cm) of water.
"You'd have never made me believe a Category 1 would dump this much water," said Sam Caruso, 71, a former mayor of Slidell who toured the town in his pickup truck on Thursday.
As the flood waters rose, some residents, including Caruso, wondered whether the new federal levee system had shored up New Orleans at the expense of low-lying neighboring parishes outside the system's protection - a debate that is likely to continue.
Benchmark crude oil prices slipped on Thursday after major oil facilities on the Gulf of Mexico made it through Isaac mostly unscathed.
The smallest of six Louisiana oil refineries began to power back up on Thursday and most other oil and gas companies in the U.S. Gulf Coast region were preparing to restart.
Some 700,000 residents and businesses in Louisiana and Mississippi were still without electricity on Thursday, down from a peak of over 1 million.
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