In this paper, we use dynamic light scattering in polarized and depolarized modes to determine the translational and rotational diffusion coefficients of concentrated rodlike cellulose nanocrystals in aqueous suspension. Within the range of studied concentrations (1-5 wt %), the suspension starts a phase transition from an isotropic to an anisotropic state as shown by polarized light microscopy and viscosity measurements. Small-angle neutron scattering measurements also confirmed the start of cellulose nanocrystal alignment and a decreasing distance between the cellulose nanocrystals with increasing concentration. As expected, rotational and translational diffusion coefficients generally decreased with increasing concentration. However, the translational parallel diffusion coefficient was found to show a local maximum at the onset of the isotropic-to-nematic phase transition. This is attributed to the increased available space for rods to move along their longitudinal axis upon alignment. This increased parallel diffusion coefficient thus confirms the general idea that rodlike particles gain translational entropy upon alignment while paying the price for losing rotational degrees of freedom. Once the concentration increases further, diffusion becomes more hindered even in the aligned regions due to a reduction in the rod separation distance. This leads once again to a decrease in translational diffusion coefficients. Furthermore, the relaxation rate for fast mode translational diffusion (parallel to the long particle axis) exhibited two regimes of relaxation behavior at concentrations where significant alignment of the rods is measured. We attribute this unusual dispersive behavior to two length scales: one linked to the particle length (at large wavevector q) and the other to a twist fluctuation correlation length (at low wavevector q) along the cellulose nanocrystal rods that is of a larger length when compared to the actual length of rods and could be linked to the size of aligned domains.