Particle-level simulations are employed to investigate the transition from linear to nonlinear theological behavior for electrorheological suspensions under startup of steady shear flow. This transition is found to first arise from the very slight rearrangement of structures, as opposed to the gross rupture of particulate columns. Linear stability analysis shows that these rearrangements occur when the structures are sheared into electrostatically unstable configurations. The rearrangements also produce a second type of relaxation phenomenon that appears at low frequencies and finite strain amplitudes. Incorporating more realistic force descriptions into the idealized simulation model shifts the transition to nonlinear deformation to smaller strain amplitudes, approaching experimentally observed values. The role of the rearrangement of unstable structures on the oscillatory shear flow response is investigated in the following paper, Part II.