* Early damage reports say 346 homes lost in blaze
* Colorado's Waldo Canyon fire only 15 percent contained
* Body found in rubble of burned-out home (Adds number of firefighters on Waldo Canyon blaze; edits)
By Keith Coffman
COLORADO, SPRINGS, Colo., June 28 - A wildfire that forced the evacuation of 35,000 people from the edge of Colorado's second-largest city has killed at least one person and incinerated 346 homes, making it the most destructive blaze in state history, officials said on Thursday.
Lighter winds helped firefighters gain new ground against the inferno, which had roared unchecked on Tuesday night through communities in the northwestern corner of Colorado Springs and threatened the U.S. Air Force Academy campus in town.
Aerial photos of devastation unleashed by the so-called Waldo Canyon Fire showed large swaths of neighborhoods reduced to gray ash - one house after another obliterated while adjacent dwellings survived mostly unscathed.
Authorities initially acknowledged the loss of hundreds of homes, but the damage toll released Thursday afternoon by Mayor Steve Bach - a preliminary count of 346 houses gutted by fire - confirmed the full extent of destruction.
Hours later, Colorado Springs Police Chief Peter Carey said a body was found in the debris of a burned-out home, marking the first known death from the five-day-old blaze.
Carey gave no further details about the person, who became the fifth killed this year in a Colorado wildfire season described by the governor as the worst ever in the state.
The police chief said he had reports of two adults missing in the fire, but it was not immediately clear whether the body found accounted for one of them.
Earlier in the day, police said some people listed as unaccounted for were believed to have neglected to register with the city or the American Red Cross as evacuees.
The tally of homes consumed by the Waldo Canyon blaze ranks as the most on record, surpassing the 257 homes swallowed in recent weeks by a much larger blaze north of Denver near Fort Collins. (Graphic of fires: link.reuters.com/cet98s)
President Barack Obama planned to visit Colorado Springs on Friday to meet with firefighters and tour the ravaged area.
RASH OF WILDFIRES ACROSS COUNTRY
Waldo Canyon was among over 40 large, uncontained wildfires being fought across the United States, the bulk of them in 10 western states -- Colorado, Montana, Wyoming, Utah, Idaho, South Dakota, Arizona, New Mexico, Nevada and even Hawaii, the National Interagency Fire Center in Boise, Idaho, reported.
Searing temperatures and strong, erratic winds in recent days stoked the Waldo Canyon 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.
With the blaze curtailed somewhat by Thursday thanks to calmer winds, the Air Force Academy went ahead with ceremonies welcoming a new class of over 1,000 cadets, base spokesman Harry Lundy said.
For the first time since the fire erupted on Saturday, a red-flag warning for heightened fire hazards was lifted for the Colorado Springs area.
"We had a pretty good day on the line today. There was minimal fire growth," incident commander Rich Harvey said.
But anguish and frustration ran high among many of the estimated 35,000 residents who had to be evacuated from homes.
"You don't have the authority to keep me out of my house," David Dougherty, 45, a retired member of the Armed Forces, shouted out during the news conference. "I understand they're trying to save lives, but some of us don't need to be saved."
Dougherty said he believed his dwelling was still intact and wanted to be let back in to the evacuation zone to secure his home and his belongings. Police reported at least two arrests for burglary in an evacuated neighborhood.
SOME EVACUEES RETURN, OTHERS LEFT HOMELESS
While authorities began allowing some evacuees to return beginning at 8 p.m. local time Thursday, hundreds of residents from neighborhoods caught in the heart of Tuesday's firestorm met privately with city officials on the campus of the University of Colorado to learn the fate of their homes.
Byron Largent, 26, and his wife, Rebekah, 31, who fled with their year-old daughter, Emma, on the first day of the fire, emerged from the meeting saying their worst fears had been confirmed. The house where little Emma took her first steps two weeks ago was gone.
Largent said some of the family's smaller belongings would be the most irreplaceable. "We lost the rocking chair that we rocked our baby to sleep in for a year," he said.
The Waldo Canyon blaze remained formidable. Fire crews had managed to carve containment lines around just 15 percent of its perimeter by Thursday afternoon - a fraction of the fire zone although still double the previous day's total, officials said.
More than 1,200 firefighters, supported by heavy air tankers and helicopters dropping flame-retardant chemicals, had been assigned to the blaze, Harvey said.
A residential subdivision called Mountain Shadows was hardest 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 Bach, the mayor, after touring the area.
The cause of the Waldo Canyon Fire remained under investigation. The FBI's Denver office said on Thursday its agents were working closely with local, state and federal law enforcement "to determine if any of the wild land fires resulted from criminal activity".
The fire menacing Colorado Springs follows a recent string of suspected arson fires in a neighboring county, but officials said they had no indication that the Waldo Canyon blaze was deliberately set.
Although federal authorities say the fire season got off to an early state in parts of the Northern Rockies, the number of fires and acreage burned nationwide is still below the 10-year average for this time of year, according to fire agency records.
In Montana alone, eight separate fires have leveled close to 100 structures. The biggest losses were near the town of Roundup, north of Billings, where 64 buildings, half of them homes, were destroyed. Hundreds of people were evacuated. (Additional reporting by Ellen Miller and Laura Zuckerman; Writing by Steve Gorman; Editing by Mark Heinrich)