Intermolecular interactions between tilted CO molecules in the (2 x 1)p2mg structure on Pd(110) were studied by means of high-resolution electron energy-loss spectroscopy (HREELS). We measured the distinctive dispersion of the C-O internal stretching mode and the hindered translational modes. The dispersion of the C-O internal stretching mode is well explained by the dynamic dipole-dipole interaction. On the other hand, the dispersion of hindered translational modes is anisotropic. In contrast to the constant T-[001] mode along [001], both the T-[001] and T-[<1(1)over bar>0] modes observed along [<1(1)over bar>0] are dispersive. The dispersive feature of the hindered translational mode along [<1(1)over bar>0] was not observed for twofold periodic CO in a p(2 x 1) structure close to half coverage on Pd(110). Therefore, the anisotropic dispersion clearly reflects a short-range interaction between the CO molecules adsorbed at the nearest neighbor sites. From the analysis of the distinctive dispersion, a strong repulsive force-constant is obtained, i.e., 10.5 +/- 1.5 N/m, which quantitatively asserts that the tilted CO is formed by the steric repulsion between the nearest neighbor molecules.