"The thunder appeared to keep coming," Mr Rendall said. "Then I felt a jolt on the side of the house."

Mr Rendall's house in Orana Avenue in Cooma bore the brunt of the 4.5 million litres of water that flooded parts of the small town in the Snowy Mountains on Saturday night, after a water reservoir burst.

As many as three or four houses will have to be demolished, Mayor Peter Beer said.

He confirmed the tank had been filled only in the past few days in preparation for the bushfire, which was at emergency level in the Kosciuszko National Park and around Adaminaby on Saturday.

About 20 homes had been impacted and initial inspections suggested three or four were beyond repair.

"It must have been terrifying," Mr Beer said of the moment when the tank gave way.

The tank had not been used for perhaps 18 months because of what he said was a minor crack. The council had confirmed a tender for repair but decided to push ahead and refill it as a back-up for firefighting last week.

"They had to make a decision which I backed in regard to the fire situation. Obviously if the fire had got into the trees it would have got into houses and damage would have been much more than what he flood was," he said.

"... There has been some talk in the town that it was ready to collapse. That is untrue. It's always been a very safe tank. It's been one of the main tanks in the town for years. It is very unexpected that it gave way."

The tower had also held the council's water monitoring equipment, which had now been switched off.

Pictures show the huge reservoir blown apart. Mr Beer said the roof and about half the wall was left. Residents say they reported leaking to authorities on Saturday, but Mr Beer said there had been similar reports of leaking for years.

When the tank disintegrated water moved with enough force to move cars, with the vehicle in Mr Rendall's driveway forced through his garage door, and another car that floated into the truck sitting outside his house.

Bridget Vella, from Sydney, had been staying with her parents in Bermagui when the family fled Bermagui after a frightening New Year's Eve in the South Coast bushfires to stay with her grandmother, Maria Roncelli in Cooma.

They were in bed when the commotion hit.

"It was a foot deep of mud and ruble and bricks and logs and just really random things," Ms Vella said of the scene they found. "We thought maybe they had dropped a water bomb on us," she said.

In the areas of Orana Avenue, Moorong Place and Mullan Place the water mark reached about 1.5 metres in some homes, Ms Vella said.

A house appeared displaced from its foundations on Orana Avenue. Cars had been swept up and shifted, a neighbour's car pushed against a fence, a concrete driveway lifted and moved.

"All this water has come a straight down the hill," she said. "Some houses are completely untouched. Others, it's just gone straight through."

Mr Beer said Cooma was "like a war zone with all the ash" but the immediate fire danger had passed, allowing crews to turn to the flood clean up.