Unexpected Behavior of jqGrid when placed on Dialog

Unexpected Behavior of jqGrid when placed on Dialog

My app calls for a jqGrid to be placed on a jQuery-UI Dialog.  I can make the grid appear as desired, but when it does all controls (including close window) on the Dialog become non-functional.  It almost appears as though the grid is operating modal and preventing interaction with the underlying dialog.

I have tried various combinations of modal and non-modal attributes in both the dialog and grid, but I can't seem to get around this.

Suggestions?