A time-dependent theory for conical emission during near-resonant propagation of laser light in an atomic vapor, which includes full propagation for the laser and frequency sidebands in a nonlinear two-level medium is presented. The density-matrix equations for the dipole moment and population are solved in the dressed atomic frame. The polarization source terms are accurate to order \ensuremath{\gamma}/R, where \ensuremath{\gamma} is a damping constant and R is the generalized Rabi frequency. Analytical plane-wave solutions and numerical, cylindrically symmetric propagation simulations including diffraction are presented. It is shown that the calculations with cylindrically symmetric fields and atomic excitation profiles are incapable of accounting for the high levels of optical gain that are responsible for the intense conical emission observed in experiments. This result is at first surprising, since the model accounts rigorously for all of the physical phenomena that have been previously proposed as being responsible for generating large gains, and the calculation matches the symmetry of the observations. The lack of large calculated gain seems to imply the existence of higher-order
(m>0) radial modes in the field for the experimental conditions that give rise to cone emission. In the simulations, however, the cylindrically symmetric fields do produce weak red-detuned cones with angular-frequency distributions similar to those seen in experiments.