PANAMA CITY BEACH, Fla. (AP) _ Hurricane Earl lost some punch as it reached Florida's Panhandle early Thursday, with top winds dropping to 80 mph as it whipped up the surf and flooded streets with heavy rain.

The edge of the vast storm's eye reached land about 2 a.m. EDT, said Michelle Huber, a meteorologist with the National Hurricane Center in Miami.

Earl's effects were being felt along the coast by Wednesday evening with heavy rains and stiff winds bending palm trees and knocking down power lines.

``Right now, it's coming in pretty heavy,'' Betty Liford, who stayed with her husband at their beachfront townhouse on Panama City Beach, said Wednesday night. ``I'm ready to leave on this one if it gets any worse than this.''

Preliminary damage reports indicated power outages, downed trees and blocked roads from Panama City east into Apalachicola, Crawfordville and Tallahassee, said Eve Rainey, a spokeswoman for the state Emergency Operations Center.

On Santa Rosa Island, outside Pensacola, cars plied flooded streets while trash cans, roofing shingles, small plants and realty signs flew through the air.

Winds gusted up to 50 mph as Panama City Beach residents boarded up homes and businesses. Many tourists packed up and left. Apalachicola to the east was practically deserted as stores closed up.

For some Panhandle residents, Earl was shaping up to be a rather tame event.

``I'm really relieved because I think it's heading east of here,'' said Ken Roman, 49, of Mary Esther. ``We'll have some cleanup tomorrow but hopefully no damage.''

At 2 a.m. EDT, Earl was churning to the northeast at 10 mph to 15 mph. Hurricane-force winds extended out 115 miles to the east and southeast of the center, while tropical storm-force winds of 39 mph extended out 200 miles.

Earl was expected to hit Florida before cutting across southern Georgia and in South Carolina. A hurricane warning stretched from the Alabama-Florida line to about 100 miles north of Tampa. A tropical storm warning extended south to the Tampa Bay area.

The hurricane, which had grown into a category 2 Wednesday afternoon with maximum winds of 100 mph, exasperated forecasters with its uncertainty. Jerry Jarrell, director of the National Hurricane Center, compared the storm to ``a plate of spaghetti'' as he tried to locate its center.

Gov. Lawton Chiles declared a state of emergency, and a tornado watch covered more than half of Florida's 67 counties.

Shelters opened in several counties. Evacuations were recommended in flood-prone areas. In Leon County, which includes Tallahassee, 20,000 mobile home residents were ordered to evacuate. Mandatory evacuations were ordered for barrier islands.

In nearby Franklin County, a mandatory evacuation order was canceled. In tiny Apalachicola, Franklin's county seat, the only activity could be found at a grocery store. Everything from Delores' Sweet Shoppe to Risa's Pizza was closed.

John Lee, who runs the local newspaper, was concerned that he couldn't make a bank deposit.

``I've been through Opal, Kate ... and Tropical Storm Juan, and this is the first time I have ever seen the bank close,'' Lee said. ``Somebody somewhere must think this is going to be a big one.''

Two men whose boat capsized near Shell Island off the Florida coast swam about three-quarters of a mile to Tyndall Air Force Base after a rescue attempt failed. A rescue boat was dispatched but was forced to return because of choppy water and high winds.

In 1995, the Panhandle took a one-two punch from hurricanes Erin and Opal for the region's first direct hits in 69 years. Erin claimed 11 lives, and Opal killed 27 people and damaged more than 10,000 buildings.

``I don't think it'll ever be as bad again as far as heartbreaking,'' said Karen Green, whose family home was destroyed by Opal. ``Once you've done it, you know you can do it again. That's the price you pay to live on this beautiful ocean.''

A flood watch covered a wide area from Tallahassee east to Jacksonville and south to Tampa Bay, where waters were expected to be highest around dawn Thursday.

The storm surge near Earl's center could be 11 feet above normal tides and 10 inches of rain was possible.