I am hoping the rain holds off like they hope and they have time to really reinforce it to keep that from happening. As you say it could be devastating.
If the dam breaks, there are going to be some seriously hard times for CA. Not only because of the flooding, but if they lose the resevoir, they will also lose a lot of water supply for a large part of the state.
You know, my roomie and I were talking about this yesterday, and she came up with what I thought was a pretty reasonable patch. Take steel plates and weld them together to patch the hole that was made by the water and mount them securely to the concrete, and then paint the whole thing with that Rhino liner stuff that they use on truck beds. Saw Mythbusters paint a house with that stuff and then blew up a car bomb in front of it. Know what happened? The windows shattered, but the building stood.