The current reports we have is of ash falling on cities in the region. There are no reports of death or serious damage. The 4,000 residents of Chaiten have been evacuated by the navy to the island of Chiloe and Puerto Montt. Currently the government is considering the evacuation of Futaleufu (or Futa) and other effected areas of the Palena region.
In Futaleufu, the municipality is asking everyone to stay inside and has cut off the city water supply as a precautionary measure because of possible contamination from the falling ash. Futaleufu is not nearly as isolated as Chaiten, as it is only a 15 km drive to the Argentina boarder. Current ash levels in Futa are about 3-10 cm as of Saturday afternoon.
We are told that the town has run out of money, and although stores are well stocked they are allowing people to buy on credit as the towns only ATM ran dry quickly. This disaster also happened to occur on a long holiday weekend in Chile.
Our recent contacts with people in the more rural areas indicate that the concern at this point is over water supplies and issues of feeding their animals. It is the start of winter in the area. The expectation is that several thousand animals may die from contaiminated pasture.
There has also been a general call from the government for people in the rural areas to move to more populated and accessible areas for better support. Much of the areas 20,000 residents live outside of towns.
The Chaiten volcano has been dormant for around 10,000 years. Initially the authorities and the media reported that it was the Michimahuida volcano that erupted in the first day, and it was picked up by the international news wires.
The president and other government officials where on route to the area Sunday to asses the situation.
At this time it is unknown how long the eruption will last, or the behavior of the volcano as it was previously unmonitored and has no history of activities. Seismic monitors and other equipment have been installed.
Updates and discussion of the subject can be found at the
Chile Forum , including reports from people currently in Futalefue:
VOLCANO ERUPTS IN PATAGONIA, CHAITEN / FUTA EFFECTED
Chaiten (Chaitén) 
