* Storm now a Category 2 hurricane
* Water pushing in over coastal roads
* Intense storm surges, inland flooding expected
* 10 million people in potential disaster zone (Updates position, adds fear of landslides)
WILMINGTON, N.C., Sept 13 (Reuters) - The outer edges of Hurricane Florence began lashing coastal North Carolina with heavy winds and flooding roads on Thursday hours before expected landfall that will bring walls of water and lingering downpours
The center of Florence is expected to hit North Carolina's southern coast around midnight (0400 GMT) on Friday, then drift southwest before moving inland on Saturday, enough time to drop as much as 40 inches (1 meter) of rain in places, according to the National Hurricane Center.
Avon on North Carolina's Outer Banks barrier islands reported winds gusting to 74 miles per hour (119 km per hour), while Morehead City had received 3.6 inches (9.1 cm) of rain in the past 13 hours, the National Weather Service said. Already some roads were flooded.
About 10 million people live in the storm's path and more than 1 million people had been ordered to evacuate the coasts of the Carolinas and Virginia. Thousands have taken refuge in emergency shelters, officials said.
Florence's maximum sustained winds were clocked on Thursday at 105 mph (165 kph) after it was downgraded to a Category 2 on the five-step Saffir-Simpson scale, according to the NHC. The winds had been as high as 140 mph earlier in the week.
"Hurricane Florence was uninvited but she's just about here anyway," North Carolina Governor Roy Cooper told a news conference, warning people not to be complacent just because the storm's winds had diminished. "Stay on guard. This is a powerful storm that can kill."
Some people who had rejected calls to evacuate took walks along the water as they tried to enjoy a few final hours of normalcy before Florence's fury arrived.
In Sea Breeze, Roslyn Fleming, 56, made a video of the inlet where her granddaughter was baptized because "I just don't think a lot of this is going to be here" after the storm.
Ten miles (16 km) away in Wilmington, wind gusts were stirring up frothy white caps into the Cape Fear River.
"We're a little worried about the storm surge so we came down to see what the river is doing now," said Linda Smith, 67, a retired nonprofit director. "I am frightened about what's coming. We just want prayers from everyone."
FLOODING, POWER OUTAGES BEGIN
The storm's center was about 108 miles (173 km) east of Wilmington, North Carolina, at 3 p.m. EDT (1900 GMT) but already some 19,000 homes and businesses were without power by mid-afternoon in the Carolinas and Virginia. Millions of people are expected to lose power from the storm and restoration could take weeks.
The hurricane center also said the threat of tornadoes was increasing as Florence neared shore and South Carolina Governor Henry McMaster said the heavy rains could trigger landslides in the western part of his state.
Florence could bring wind-driven storm surges of seawater as high as 13 feet (4 meters) and NHC Director Ken Graham said on Facebook they could push in as far as 2 miles (3 km). Heavy rains were forecast to extend into the Appalachian Mountains, affecting parts of Alabama, Tennessee, Kentucky and West Virginia.
Emergency declarations were in force in Georgia, South and North Carolina, Virginia, Maryland and the District of Columbia.
Near the beach in Wilmington, a Waffle House restaurant, part of a chain with a reputation for staying open during disasters, had no plans to close, even if power is lost. It had long lines on Thursday.
Will Epperson, 36, a golf course assistant superintendent, said he and his wife had planned to ride out the storm in his home in Hampstead, North Carolina, but reconsidered due to its ferocity. Instead, they drove 150 miles (240 km) inland to his mother's house in Durham.
"The anxiety level has dropped substantially," Epperson said. "I've never been one to leave for a storm but this one kind of had me spooked."
(Reporting by Ernest Scheyder Additional reporting by Bernie Woodall in Fort Lauderdale, Florida, Carlo Allegri in Wilmington, Mana Raibee in Sea Breeze, North Carolina, Anna Mehler Paperny in Washington, North Carolina, Brendan O'Brien in Milwaukee and Stephanie Nebehay in Geneva Writing by Brendan O'Brien and Bill Trott Editing by Nick Zieminski and Lisa Shumaker)