Can strong winds significantly lower ocean surface levels, or is it really the static pressure differences?
The explanation for the wind effect on water level at the coast is basically the same as for upwelling circulation. In an upwelling situation, the winds flow parallel to the coast and generate upwelling dynamics: surface Ekman balance is setup (in deep enough waters) with water transport being to the right (left) of the wind in the northern (southern) hemisphere; this causes a deficit along the coast that needs a compensating flow in the deeper part of the water column bringing cold water to the surface. The deficit along the coast and the resulting sloping density levels create a geostrophic balance and that causes the surface water level to drop near the coast (wind set-down).

A good diagram of the processes at play is available from Csanady (1981). 
Source: EOS

In reality, the Ekman balance-geostrophic balance combo is a better approximation when the shelf is narrow and there is a stronger connection with the open ocean. In shallower areas, the wind that matter most is not the along-shelf wind, but rather the cross-shelf wind:


Depth of the wind-induced currents and the shoreline


In the case of a hurricane, the winds and atmospheric effects are so strong that it is difficult to separate the two. The article cited in the question mentions the two effects. The fact that the wind lined up with the coastal alignment suggests that wind set-down might have been a factor. It is not that uncommon for wind set-down to be a controlling process (e.g., Red Sea (also)).


Csanady, G. T. (1981). Circulation in the coastal ocean, Part 1. Eos, Transactions American Geophysical Union, 62(2), 9-11.