HIGHLAND, Ind. (AP) _ About 120 residents of a flood-ravaged housing subdivision were barred from returning to their homes after cancer-causing PCBs were discovered at unacceptably high levels, officials said Thursday.

Test results shared by the U.S. Environmental Protection Agency led the state to declare the houses off-limits to residents hoping to return for personal items. The EPA said it found double the acceptable levels of PCBs.

The cause of the contamination had not been determined.

Jim Lynch, a spokesman for the Indiana Department of Environmental Management, told reporters that officials were researching the history of the area, which had apparently been used as a ''dumping area.'' Lynch did not elaborate.

However, residents of Wicker Park Estates in Highland and other areas hit hard by flooding last week got some good news Thursday when President Bush declared Lake County a disaster area.

Sen. Richard Lugar, R-Ind., received word that Bush signed the disaster declaration, Lugar aide Kevin Kellems said by telephone from Washington, D.C.

PCBs, once commonly used as insulation in electrical transformers, were banned by the federal government as a cancer-causing substance in the 1970s.

Tests for PCBs were conducted after Highland officials reported seeing a sheen on floodwaters and suspected oil and gasoline may have leaked from submerged automobiles and fuel tanks.

Jerome Hauer, director of the Indiana Emergency Management Agency, said the EPA has not determined whether the contaminants were present before the flooding.

''Those are relatively high concentrations of PCBs, and it's unusual to find them in a residential area,'' said Walter Nied, emergency response coordinator for the EPA's Region 5 office in Chicago.

The EPA sent 2,500 gallons of oil and water collected from residents' yards to be tested, Nied said.

The EPA told state officials the high level - 1,100 to 1,200 parts per million - suggests the contamination occurred from a local source, Hauer said. ''Nine fuel oil tanks broke loose during the flood and we're going to sample them. We will also sample the interior of homes,'' he said.

If PCB contamination is found in one of the yards, neighboring yards will be tested until the extent of contamination is determined, Nied said. He said the contamination appeared to be confined to a section of homes closest to the river.

Residents in the 270-home Wicker Park subdivision had begun returning Monday to gather personal items from homes damaged last week when 6 inches of rain caused heavy flooding.

Utilities had been shut off to the subdivision and emergency officials were uncertain when residents would be allowed to begin repairing and rebuilding. The disaster declaration will enable Lake County's flood victims to get low- interest loans and other assistance on a case-by-case basis, Kellems said.