* About 650,000 people without power in New Jersey
* Flood warnings issued in many parts of the state (Updates with Governor Christie comments)
By Grant McCool
TOMS RIVER, N.J., Aug 28 (Reuters) - Hurricane Irene swept along the New Jersey shore early on Sunday, knocking down trees, leaving thousands of people without electrical power and causing flooding.
New Jersey Governor Chris Christie cautioned residents and visitors, hundreds of thousands of whom were ordered to leave vulnerable shore towns, to stay away until roads were clear.
"The real issue we're going to have to deal with now is flooding. This storm is transitioning into a flooding event," Christie told reporters at a midday briefing.
More than 100 dams in the state were being monitored for spills from high water, with evacuations from one downstream town, High Bridge, ordered, he said.
Christie said there were about 650,000 people without power across the state and that number could increase during the day on Sunday because of the sustained 45 mile-per-hour (72-kilometer-per-hour) winds.
More than 15,000 people were in shelters around the state and about 3,000 people had been evacuated from 25 medical facilities in the last two days, including two hospitals.
That said, some roads were being reopened as officials inspected them. Christie also said damage to beaches along the Jersey Shore, a mecca for tourists, was being assessed and beaches would be reopened as soon as conditions allowed.
"We're going to resume beach water quality monitoring on Monday so we can get our beaches open as quickly as it's safe for people to be back in the water," Christie said.
Earlier, on NBC's "Meet the Press" program, the governor said he expected damage from the storm could be "billions of dollars, if not in the tens of billions of dollars."
More than a million people had fled resort towns along the Jersey shore ahead of Irene. Mandatory evacuations covered all of the barrier island beach resorts, including such well-known spots as Atlantic City, Cape May and Long Beach Island.
Flood warnings were issued in many parts of the state on Sunday, as rivers and creeks rose to dangerously high levels.
In Parsippany, water from the Passaic River spilled onto roadways, making driving risky.
In Seaside Heights, known to fans of "The Jersey Shore" reality television show, and in the upscale towns of Bay Head and Mantoloking, roads were flooded with as much as a foot (30 cm) of water, and area bridges were shut down.
Water levels on the Delaware River were high, prompting official flood warnings in Easton, Pennsylvania, and Phillipsburg, New Jersey, which straddle the waterway.
Despite the widespread effects, reports from the National Weather Service suggested that Irene fell short of the most dire predictions that it could drop up to 12 inches (30 cm) of rain and pack 75 mile-per-hour (121 kph) winds.
Irene was downgraded to tropical storm status on Sunday morning as it pummeled the New York and New Jersey area.
Along the shore, Atlantic City had 4.56 inches (11.6 cm) of rain as of early Sunday, and inland at Windsor, a suburb of Trenton, the town got 6.1 inches (15.5 cm), the Weather Service said.
Wind in Tuckerton, New Jersey, in Ocean County, hit 69 mph (111 kph), the Weather Service said.
"We dodged a bullet," said Police Chief David Wolfson of Margate, a seaside town just south of the state's gambling mecca, Atlantic City.
In Toms River, about 8 miles (13 km) west of the shore, trees were down and streets were flooded.
"It was a storm, but we have seen worse," said Eddie Storino, Toms River Fire Company No. 2 assistant chief. He said the brunt of the storm came between midnight and 5 a.m.
Inland rivers and creeks were overflowing. The Manasquan River, which runs from Freehold, New Jersey, to an inlet on the coast, was several feet above flood level.
Christie said state damage assessments along the coast would begin on Sunday but inland damage may not become obvious until river flooding subsides as late as Tuesday.
In Margate, the highest wind was clocked at 56 mph (90 kph), police chief Wolfson said, and some sections of its major thoroughfare, Ventnor Avenue, were under water.
State police rescued about 100 people from a senior citizen development in Buena Vista Township in Atlantic County overnight after the modular homes were surrounded by about a foot of water.
In the northern part of the state, local streets in Jersey City were flooded.