New Orleans, look to Seattle
As New Orleans rushes to rebuild, they could take a useful lesson from the experience of Seattle. Most of the downtown of Seattle was destroyed in the Great Seattle Fire of 1889. Seattle was originally built on low land that often flooded; worse, in a way, when the tides ran a certain way, sewers... well, ran backwards. This caused homes to have to build their flushing toilets up a flight of stairs, if they didn't want to periodically be revisited by their wastes.
So after the fire, city officials debated raising the street level by filling in the land. And they debated and debated... and merchants went ahead and rebuilt on the ground that was there. So when they finally committed to the ground raising (and street levels were raised some 36 feet in places), businesses' fancy storefronts became basement level and their second and third stories became street-level.
For a time, the original street levels were left as deep trenches you could reach via ladders, then they were covered over and condemned because of fear of crime and disease (rats!) In the '60s, an enterprising citizen had some parts of the tunnels that used to be the city sidewalks cleaned up and reinforced and now you can tour the 'Seattle Underground', peering in at fin-de-siecle storefronts and enjoying the creepy ambiance.
So, New Orleans, think of raising the ground level, but don't waffle too long.