By dawn, the trickle that began to seep into the neighborhood during the night had become a scalding torrent. Mud surged into the modest house belonging to Sumitro, who manages a store in the Porong District of East Java. As it smothered furniture and filled rooms, Sumitro and Indayani, his wife, grabbed the kids and fled. “I knew the mud couldn’t be stopped,” he says. “My house was doomed.”

Months later, a plume of steam drifting above a landscape of submerged houses marks the source of his woes: a mud volcano—its cause a source of some controversy. Many blame a company drilling for gas; others claim an earthquake was the trigger. Lusi, as Indonesians call the mudflow, is one of the more bizarre expressions of Indonesia’s geologic turmoil. Since May 2006, it has spewed millions of barrels of heated sludge, blanketing an area twice the size of New York City’s Central Park. Villages have disappeared under the mud, 60 feet (18 meters) deep in places, and 10,000 families have been forced from their homes. So far, according to an IMF estimate, the catastrophe has cost Indonesia 3.7 billion dollars—nearly one percent of its GDP—and triggered spasms of blame and denial. This being Indonesia, it has also prompted appeals to the supernatural.

Lusi—a nickname derived by combining the Indonesian word for mud (lumpur) with Sidoarjo, the name of the nearby town—could go on erupting for decades. Meanwhile, trucks and backhoes work relentlessly to contain the damage, fortifying dikes against the 600,000 barrels of mud that continue to surge out each day. Pipes disgorge the sludge into the Porong River; theoretically, rain will wash it to sea—if it doesn’t choke the river and flood nearby Surabaya, a city of 2.5 million.

With the mud came the mystics—Sumatran witch doctors, Balinese Hindu priests, and a celebrity soothsayer, Mama Lauren—claiming they could stop the deluge. Believers tossed goats, geese, and monkeys into the mud to appease the dragon supposedly disturbed by drilling. A wealthy local offered a house to anyone who could halt the mud. First, however, applicants had to prove their powers could stop a tap from dripping. It didn’t happen.

Wary of mystics, weary of mud, Sumitro is short on optimism. “Nothing can stop it,” he says. “Not technology, not the supernatural.”

A dike protected Sumitro’s neighborhood until November 2006, when the mud caused a gas pipeline to explode, killing 13 people. “I thought the end of the world had come,” he recalls.

In a way, it had. The explosion weakened the dike, exposing his neighborhood to the flow. Now, footprints of fleeing residents are baked into the mud of empty streets. Scavengers have stripped homes of roof tiles and wiring. The stink of sulfur hangs in the air. “Nothing left now,” Sumitro says. “Only memories.”

The politics surrounding the disaster are as muddy as the landscape. PT Lapindo Brantas, the company that operated the ill-fated well, is partly owned by the family of Aburizal Bakrie, Indonesia’s chief welfare minister. Bakrie, a billionaire, says the well had nothing to do with the catastrophe; he blames it on a powerful earthquake that struck Yogyakarta, 170 miles (270 kilometers) away, two days before the mud flood. He has yet to visit Lusi’s victims. Just as well. Anger pervades a market where thousands of displaced villagers encamp. “If Bakrie comes here,” one man says, slowly drawing his finger across his throat. Still, Bakrie enjoys the backing of President Susilo Bambang Yudhoyono, who may run again in 2009 and apparently opts not to alienate a fat-cat cabinet member by demanding his resignation.

The Indonesian government ordered Lapindo to pay more than 400 million dollars in compensation. But the money has been slow in coming; Sumitro, chief negotiator for 800 families, believes the company is stalling.

Not so, says a spokesperson for Lapindo. She explains compensation is delayed because claimants cannot provide adequate proof of home or land ownership, and maintains the company has already spent millions to house and feed victims. Claims will be fully paid within two years, she promises, adding that Lapindo has no legal obligation because the disaster’s cause remains unproven. “We don’t know yet whether this is our fault,” she says.

One study by an international team that included a Lapindo employee supported Bakrie’s claim that the earthquake caused the mess. But Richard Davies of Durham University in England is dismissive. “One, the earthquake wasn’t big enough and was too far away,” he says. “Two, we have pretty good evidence for how drilling would have caused this incident.”

Davies’ own studies concluded the eruption was triggered by the drilling and the attempt to control a huge influx of water and gas that fractured sections of the borehole.

An attempt to plug the hole with thousands of concrete balls failed last year. Now Soenarso, chief of the Sidoarjo Mudflow Mitigation Agency, is out of ideas for halting the flow. “I can only say it is in the hands of God Almighty,” he told the Jakarta Post.