The Panama Canal, which connects the Atlantic and Pacific Oceans, is a key channel for international trade, and one of seven wonders of the modern world. More than 14,000 vessels traverse its waters each year. The canal took 33 years to build, during which more than 27,000 human lives were lost to accidents and disease.

— information from the Panama Canal collection at the University of Florida, Gainseville, Fla.

Many things drew me back to visit Panama this year after a four-decade absence, but the fact that I graduated from Balboa High School in 1967, in what was then the Panama Canal Zone, wasn't among them.

My high school experience was happy. But life inside the heavily guarded, 10-mile-wide Canal Zone couldn't compete for excitement with the wonders of the kaleidoscopic country rubbing up against us.

The Zone had ubiquitous air-conditioning, no slums, the might of the U.S. military and virtually no crime. Panama had sophisticated nightlife and exotic wildlife, unspoiled islands, impenetrable jungle and Indians living ancient ways.

Yes, I was curious to see what Panamanians had done with the Canal Zone since it all was turned over to them in 1999. But I was more curious to see what had become of the devoutly independent Kuna Indians who sparsely populate the San Blas Archipelago, 378 small islands in the Caribbean Sea.

I had last visited the Kuna in 1970, flying with a bush pilot named Castro in a four-seater plane to the one, bare-bones hotel in the region. Was it possible to find the Kuna and the islands unchanged?

I arrived in Panama with my husband and four of our close friends on New Year's Day. We had two weeks and a four-point focus: Panama City, the islands, the mountains and the Canal. Only I had been to Panama before.

Old Panamanian friends rightly warned that I would hardly recognize Panama City, a major international banking hub. All I could think of was Dubai, and we soon learned that a similar rush to cash in on progress meant some of the high-rises were shoddily built and half empty.

To escape the center-city mayhem, I had booked us into Casa Ramirez, a modestly priced new B&B in a big 1950s house with pool and gardens in the old residential neighborhood of Altos del Golf.

Despite its proximity to a house owned by the Panamanian president, the locale wasn't elegant. But the house, at one time a high-priced brothel, was. We were told that a politician once tried to score points against his opposition by mailing customers' names to their wives.

Casa Ramirez has five big, beautiful bedrooms, and with one temporarily out of order we practically had the house to ourselves. But the real perk was house manager Sophie Boesenberg, a young American expat who made us a flan so superb it couldn't be surpassed anywhere.

Sophie also connected us with Kevin O'Brien, another American expat and "Panamaphile," owner of the Barefoot Panama tour company. We hired Kevin to pick us up at the airport, and never let him go.

We all gravitated toward Kevin's own neighborhood, Casco Viejo (the old city), a UNESCO World Heritage Site with architecture resembling Old Havana. A highway being built along Casco's waterfront threatens its UNESCO status. But it's still the place for local art and great Latin music.

As for the former Canal Zone, it looked prosperous and tidy, defying dire predictions from American supremacists that it would go to seed once they left. We even found my former home, owned by a Panamanian couple working for the Smithsonian Institution, undergoing a handsome renovation.

Panama is a top retirement spot for Americans due to its climate, natural beauty and good health care. But for tourism it trails Costa Rica, despite an equally impressive variety of birds — more than the U.S. and Canada combined — and monkeys.

No slight to Costa Rica, but only Panama has the Canal, now undergoing a major widening project. The Panama Canal Museum, detailing the huge cost of constructing the 50-mile-long waterway in money and especially human life, is so good we almost decided to skip boarding a tour boat for a partial Canal transit.

That would have been a big mistake. There's no sensation quite like reaching out to touch the Canal walls as your boat rises to the next level.

Along the Canal route we passed the prison holding former Panamanian leader Manuel Noriega, the infamous drug trafficker ousted by the U.S. in 1989. "Wave!" urged our Panamanian tour guide.

It turned out that our guide was born in the Canal Zone at the former Gorgas Hospital, when my father was assistant director there. He said all Panamanians born at Gorgas — and many were since the U.S. employed a massive local workforce — automatically had dual U.S.-Panamanian citizenship.

Perhaps that's another reason U.S.-Panama relations were never as ugly or bloody as in other colonialist enterprises.

The Canal expansion now underway brings to mind a chilling footnote in a history of Panama published in 1966. The author predicts such an expansion could best be accomplished by detonating nuclear explosives.

Radiation would be minimal, the author assures, but the Kuna Indians would have to be displaced due to their proximity to ground zero. It's no small satisfaction that in the years since, mankind has realized both the folly of nuclear explosions and the virtue of protecting indigenous people.

Two days after our Canal transit we boarded a 12-seater prop plane for a 30-minute trip from the Pacific to the Caribbean coast. We landed at Playon Chico in the San Blas Archipelago, known as Kuna Yala. From there, Kuna Indians delivered us to Yandup, a tiny, pristine island surrounded by coral reefs.

Yandup Island Lodge is one of only two Kuna-owned and -operated hotels. It consists of ten spacious but simple huts on stilts, some over water and some on the beach, all with 360-degree porches and solar-powered electricity. There is no Internet, and the only music is the sound of a conch shell blower calling you to eat locally caught seafood.

The Kuna are said to be the world's smallest people, after pygmies. They are tough, resilient, and renowned for their colorful "mola" fabric art, which Kuna women wear, and Western women frame or make into throw pillows.

At Yandup, daily tours took us to mangroves, aboveground burial plots and to the Playon Chico community, where we bought molas strung up outside of huts, and joined Kuna youth in playing basketball or volleyball.

I've read that few indigenous peoples maintain their native lifestyle as religiously as the Kuna, and nothing I saw contradicted that. Yet more Kuna youth are leaving Kuna Yala for mainland Panama.

This seems inevitable. But the degree to which Kuna Yala hasn't changed is at least as astounding as the degree to which Panama City has changed.

After Yandup we flew to the western city of David, then drove to the mountains of Cerro Punta. There, near the Costa Rican border, we settled into an ecolodge in Guadalupe called Los Quetzales, named for the gorgeous but elusive Quetzal bird and owned by my Panamanian friend Carlos Alfaro.

Carlos said his family, like others, bought land in Cerro Punta during early Cold War days in part because people feared a nuclear attack on the Canal and wanted to be as far away from the fallout as possible.

Everything Cerro Punta is renowned for — coffee, flowers, horses, birds, double rainbows, cloud forests — added up to heaven for me. And Los Quetzales is a heavenly base, with welcoming spaces, healthy local food, and artwork by Brooke Alfaro, brother to Carlos and one of Panama's best-known artists.

A short walk took us to Finca Dracula, home to one of the world's largest orchid collections, named for the vampirish orchid and host to an "orchid art" competition that may well be unique. A short ride to Volcan, with its rich volcanic soil, took us to the breathtaking Janson Coffee Plantation.

A totally unexpected thought took hold of me in Cerro Punta: I could live here.

Happy as my young life in Panama was, the burden of coming from the Canal Zone meant I always thought of myself as a bit of an interloper. The best part of returning after 40 years was the lifting of the burden.

Now I'm just a traveler, an admirer, and — while I'm unlikely to ever actually move there — someone who could make Panama a home.

Bethe Dufresne is a former Day editor, reporter and columnist.

The writer remembers her dad

My father, William Theodore Gaudy, was a New York City native who lived many years in the American South, a veteran of World War II and a world traveler. He taught me that who you are, not where you live, determines how happy you are.

He was an Army officer in the Medical Service Corps, then a civilian hospital administrator, and finally an antiques dealer who collected beautiful one-of-a-kind objects and sometimes sold one or two.

My father taught me the value of finding a job you love, doing it well and making it fun. He taught me that you can take care of your health and still taste all the good things in life. He lived to be 94, and made the most of it.

He taught me that there's no excuse — ever -— to be bored, or to take out your travails on someone else. He was a lovely man who taught men to be gentlemen, and his daughter to appreciate that.