The intensity of transmitted laser beams is monitored during the holographic formation of polymer dispersed liquid crystal gratings. Significant attenuation of the total transmitted intensity is experienced after brief illumination. In most cases the attenuation increases for several seconds before reaching a steady-state value. Analysis of the individual beam intensities reveals energy exchange between the beams in a nonlinear two-wave mixing process. This information is analyzed to help gain insight into the complex dynamics of H-PDLC formation.