The barrier lake in eastern Hualien county burst Tuesday, washing away a bridge and sweeping into a town with a trail of thick sludge and mud.

"It was like a volcano erupting.... the muddy floodwaters came roaring straight into the first floor of my house," Hsu Cheng-hsiung, 55, a neighbourhood leader of Kuang Fu township, told AFP.

Lee Kuan-ting, a Hualien County Government press official, said 14 people were killed and 18 injured.

The National Fire Agency said 124 people were missing.

"It was a disaster movie," a local resident Yen Shau, 31, told AFP.

He said an hour before the lake burst, many people were still at the local supermarket and grocery store.

"Within minutes, the water had risen to halfway up the first floor," he said.

He said he couldn't sleep Tuesday night for fear of another deluge from the lake, and on Wednesday was shoveling mud from his home.

"The mud was just too deep, too deep to dig out," he added.

Footage released by the fire agency showed flooded streets, half-submerged cars and uprooted trees.

Across Taiwan, more than 7,600 people were evacuated due to Typhoon Ragasa.

Taiwan experiences frequent tropical storms from July to October.

Typhoon Danas, which hit the island in early July, killed two people and injured hundreds as the storm dumped more than 50 centimetres of rain across the south over a weekend.