Tropical storm Lee dumped more than 30 centimetres of rain in New Orleans and spun off tornadoes elsewhere, but was downgraded to a tropical depression late Sunday night as it continued its slow crawl north.

Areas of Alabama, Louisiana and Mississippi near the coast reported scattered wind damage and flooding, but evacuations appeared to be in the hundreds rather than the thousands, and levees in New Orleans were doing their job just over six years after Hurricane Katrina swamped the city.

National Hurricane Center specialist Robbie Berg said Lee's flash flood threat could be more severe as the rain moves from the flatter Gulf region into the rugged Appalachians.

Closer to the Gulf, the water is "just going to sit there a couple of days," he said. "Up in the Appalachians you get more threat of flash floods, so that's very similar to some of the stuff we saw in Vermont."

Vermont is still cleaning up and digging out dozens of communities that were damaged and isolated last week when heavy rain from tropical storm Irene flooded mountain rivers.

No deaths had been directly attributed to Tropical Storm Lee, though a body boarder in Galveston, Texas, drowned after being pulled out to sea in heavy surf churned up by Lee. A man in Mississippi suffered non-life-threatening injuries when authorities said he was struck by lightning that travelled through a telephone line.

The vast, soggy system spent hours during the weekend hovering in the northernmost Gulf of Mexico before its eye finally crossed into Louisiana west of New Orleans, pelting a wide swath of coastline.

At 5 p.m. ET, the National Hurricane Center said Lee had maximum sustained winds of 72 km/h. Its centre was about 175 kilometres west-northwest of New Orleans, moving north-northeast at seven km/h.

Some of the damage on the Gulf Coast, where tropical storms are an almost yearly event, appeared to come from spinoff tornadoes that touched down in southern Mississippi and Alabama.

Dena Hickman said her home in Saucier, Miss., was damaged overnight by what she believes was a tornado. It happened too fast for her to get her 12-year-old daughter, who uses a wheelchair, out of her bed and into a safer place.

"I laid on top of her to try to protect her. It all happened so quickly I couldn't do anything else," she said.

Her family weathered the storm, but it damaged shingles on their roof, flipped a 10-metre camper on its side, ripped off the roof of a cinderblock building that houses a water pump and pulled the doors off of a metal shop building. The contents of a neighbour's pulverized trailer were scattered across the Hickmans' yard.

In New Orleans, almost 36 centimetres of rain fell by midafternoon Sunday. Downpours caused some street flooding Saturday and Sunday, but pumps were sucking up the water and sending it into Lake Pontchartrain.

Flooding in Livingston Parish forced an estimated 200 families from their homes, said Mark Benton, parish director of the Office of Emergency Preparedness.

A possible tornado struck southern Mobile County in Alabama, snapping oak limbs, knocking out power and damaging at least one home. No injuries were reported, but the blast awoke Frank Ledbetter and ripped up the sign for his art gallery.

"It just got louder and louder and louder. I woke my wife up and said, `It's a tornado.' We just dove into the closet in the bedroom," he said.

Mississippi Emergency Management Agency spokesman Greg Flynn said flooding was reported in Mississippi's six southernmost counties, with some homes flooded in coastal Jackson County. Shelters were opened in Jackson and Hancock counties, but few people were using them.

Forecasters said Lee was expected to maintain tropical storm strength, with maximum sustained winds of at least 50 km/h through Monday as it pushes across Mississippi.

Marc McAllister, a meteorologist with the National Weather Service in Jackson, said Lee is expected to weaken over the coming days, but it could drop up to 20 centimetres of rain as it pushes across Alabama on Tuesday and Wednesday and into Tennessee, Georgia and North Carolina. The storm is expected to produce less rain the farther north it gets.

On Alabama's main tourist beaches in Gulf Shores and Orange Beach, officials feared Lee would dredge up mats of submerged tar from last year's BP oil spill that could be lurking in shallow water just beyond the surfline.

Orange Beach Mayor Tony Kennon said the city hadn't received any confirmed reports of fresh oil on the beaches, which were clean and white before the storm, but he said he wouldn't be surprised if they did.

"We know it's out there, but [the storm] hasn't been that bad here. Maybe the tar mats will just stay out there," Kennon said.

With files from The Associated Press