UPDATE 2-Evacuees cleared to return after eastern U.S. floods

(Recasts with evacuees allowed to return home)

By Paul Eckert

WILKES-BARRE, Pa., Sept 10 (Reuters) - Some people evacuated as flood waters rose in Pennsylvania were allowed to return to their mud-caked, water-logged homes on Saturday as the water fueled by rain from deadly Tropical Storm Lee began to recede.

But others among the more than 130,000 evacuees in three states were forced to remain in shelters because their homes were uninhabitable, authorities said.

Homeowners in Pennsylvania braced to clean the toxic mess left in their basements and living rooms by the Susquehanna River, which had washed out 10 sewage treatment plants.

The death toll from the storm rose to nine on Saturday, including people killed in Pennsylvania, Virginia and Maryland.

President Barack Obama declared a federal emergency in both Pennsylvania and New York, home to river towns submerged under as much as 8 feet (2.4 metres) of water.

In Wilkes-Barre, Luzerne County engineer Jim Brozina said the Susquehanna had receded enough that people could return to their homes starting on Saturday afternoon.

"You are allowed to return to your properties to begin cleaning up," he said at a news conference.

"If your home was flooded, you will not have power because (local utilities) will have removed your electric service meter and in order to have that turned on, your entire electric system will have to be inspected before you have power again."

Luzerne County Commissioner Steve Urban said the number of people in shelters fell to about 1,000, although some returned to shelters after finding their homes too damaged to stay.

"There are still going to be people needing shelters today," he said.

Officials warned that any flood water remaining in houses and yards was potentially toxic.

"You don't want to be breathing in any dust particles or anything like that," Stephen Bekanich, county emergency coordinator, told the news conference.

"There's raw sewage, there's the potential for petroleum products from home heating oil and things of that nature maybe mixed in with the flood waters."

Bekanich advised that people wear heavy boots, rubber gloves and safety glasses when doing clean-up work.

Urban said engineers were examining the levee system and utility companies were working to restore gas and power to areas where it was shut off right before the flood.

"There's a degree of normalcy returning for the people in areas protected by the levee, but there's a lot of work ahead for a number of communities outside the levee system," he said.

Wilkes-Barre officials estimated that about one quarter of the districts in the city of 41,500 people were flooded.

More than 130,000 people in Pennsylvania, New York and Maryland were evacuated Thursday due to rising waters.

Scattered thunderstorms for the rest of the weekend could unleash heavy rain in some areas, threatening flash flooding, according to meteorologist Meghan Evans on Accuweather.com. A break in the clouds was predicted for Monday and Tuesday before more wet weather returns at midweek. (Writing by Barbara Goldberg; Editing by Greg McCune)