We report time profiles of transient grating diffraction signals created by crossed beam excitation of 170 mu m thick nematic MBBA film. At the excitation wavelength of 355 nm and the irradiance of 10 mJ/cm(2), corresponding to a strong absorption condition, the signal consists of four distinguishable components in the time range of submicroseconds to milliseconds When the grating spacing is 8 mu m, the fastest component due to thermal diffusion near the surface rises within the time resolution of the experiments (similar to 20 ns) and decays in about 10 mu s. This component exhibits a strong dependence on the polarization of the probe beam, which reduces as the temperature approaches the nematic-isotropic phase transition point. The weakest and slowest component observed in the time scale of 100 ms is identified as mass diffusion of cis-MBBA. The other two components of the diffraction signal dominant in the submillisecond and the millisecond regimes, respectively, display an exponential rise followed by an exponential decay. These components are interpreted as dynamics of the reordering processes induced by temperature perturbation and by the phototransformed state, respectively. As the temperature approaches the phase transition point, the optical nonlinearity increases to such an extent that multiple order diffractions are visible. The phototransformed state, with a significant contribution from laser-induced melting, is the major cause of the extraordinarily high optical nonlinearlity of MBBA near the phase transition point.