Analog transmission in single-mode fiber using chirped sources gives rise to nonlinear distortion when polarization-mode dispersion (PMD) is present. We investigate experimentally and theoretically two mechanisms for this distortion: for chirped sources, PMD in the presence of polarization-mode coupling results in second-order distortion that is proportional to the square of the modulation frequency; when polarizationdependent loss is present, an additional second-order distortion term occurs that is independent of modulation frequency. Both mechanisms give rise to distortion that is time varying due to the sensitivity of PMD to ambient temperature changes. Numerical examples indicate that these effects can limit the capacity of analog systems that use directly modulated semiconductor lasers.