To study how highly magnetized liquids behave in NMR experiments, we have performed low-field NMR on laser-polarized liquid 129 Xe, with nuclear polarization of up to 6%. Contrary to conventional NMR results, we find that instabilities develop after a large pulse, leading to an unexpectedly abrupt decay of the signal. In contrast, the NMR spectrum after a small pulse collapses to a series of unusually sharp lines ͑spectral cluster-ing͒, whose widths correspond to precession lifetimes longer than a half minute. We discuss the key role of long-range dipolar coupling in such spin dynamics.