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KILL DEVIL HILLS, North Carolina (CNN) -- A giant Hurricane Earl raked the North Carolina coastline with high winds and 35-foot waves Friday morning, but the governor said the state had "dodged the bullet" as the massive storm moved toward New England.

Gov. Bev Perdue told CNN's "American Morning" that there had been no loss of life and apparently minimal damage from the Category 2 hurricane.

"We are all anxious to get property assessments from Dare County," said Perdue, where the storm surge drove water over state Highway 12, cutting off Cape Hatteras and the southern Outer Banks.

Southern North Carolina's beaches, she was quick to point out, "will be open for business this Labor Day weekend."

At Kill Devil Hills, CNN Meteorologist Rob Marciano said the rain was "like needles in the face" as the storm passed by.

He said waves continued to "churn like a washing machine" with the surf pounding the beaches.

Dare County officials said wind gusts of 70 mph had been recorded in the area.

"In multiple locations, waves have crashed over the tops of the dunes and are now flooding several portions of the main state highway on both the north and south sides through the Outer Banks. This is all happening south of the area called the Oregon Inlet," CNN's David Mattingly reported from the community of Waves.

Ben McNeely from Charlotte, North Carolina, was riding the storm out in the community of Manteo.

"We're in the middle of the island," McNeely said. "Surf's up, waves are up ... We're fully surrounded by water."

Ray Sturza, the mayor of Kill Devil Hills, North Carolina, said his town was handling the onslaught of rain pretty well.

Sturza said streets in his town in North Carolina's Outer Banks were not as flooded as he thought they would be Friday morning.

Sturza estimated that as many as 200,000 tourists may have left the town ahead of the storm.

As North Carolina took the brunt of the storm, residents farther up the Eastern Seaboard braced for a stormy Friday.

Warnings and watches stretched from North Carolina to Canada, including Massachusetts, where a hurricane warning was issued for Cape Cod, Martha's Vineyard, Nantucket and the surrounding area.

Officials in Dare County, North Carolina, issued mandatory evacuation orders ahead of the storm for the coastal county, including the Outer Banks. Dare County schools and courts will be closed Friday.

The Red Cross opened a shelter in Kill Devil Hills for evacuees.

"We'll feed them, give them basic first aid, cots, blankets pillows -- we'll take good care of them until they can get back in their homes," said volunteer Jim Guidone. "We are prepared for a very, very major storm ... So, we have lots of assets ... that we've moved in the area."

Perdue said some National Guard troops had been activated and more are on standby.

Earl is a large storm, meaning effects will be widely felt. It covers about 166,000 square miles -- larger than California, which covers just under 160,000 square miles. The storm's outflow, or the clouds associated with it, could stretch from one end of the state of Texas to the other, said CNN meteorologist Reynolds Wolf.

"Conditions are going to deteriorate rapidly," FEMA administrator Craig Fugate said, and people should not be lulled into thinking Earl is going to miss them.

Fugate urged those in New England, who may not be used to hurricane preparations, to find out what their community plan is and whether they are in an evacuation zone -- and to figure out where they would go if an evacuation order is issued.

Earl is expected to make a direct landfall over southern Nova Scotia on Saturday morning as a strong Category 1 hurricane.

On Cape Cod, the Barnstable County Sheriff's Office warned residents in low-lying and flood-prone areas to get out.

"In the morning, police and firefighters and our civilian response team will be going door to door to make sure they got the message," said Yarmouth Fire Chief Michael Walker. "We're telling people 'we really think you should leave. We think you may be at risk.'"

Ferry service to Nantucket and Martha's Vineyard was curtailed ahead of the storm.

Unlike most, Georgia Silliman, 88, was headed toward Nantucket -- not away -- unfazed by Earl's approach.

"I don't care ... I love it," Silliman said Thursday as she waited in line with trusty pooch Jenny, her nephew and his wife, who are visiting from Spain.

"We're gonna pull the storm windows down and we're going to the store (for provisions)," she said.

Silliman said she won't take chances.

"Not too many, " she said with a grin.

-- CNN's Susan Candiotti, Angela Fritz, Rick Vincent and Randy Harber contributed to this report.

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