We report imaging polarimetry of segments B and C of the Jupiter-family Comet 73P/Schwassmann-Wachmann 3 in the I and H bandpasses at solar phase angles of approximately 35 and 85deg. The level of polarization was typical for active comets, but larger than expected for a Jupiter-family comet. The polarimetric color was slightly red (dP/dL = +1.2 +/- 0.4) at a phase angle of ~ 35deg and either neutral or slightly blue at a phase angle of ~ 85deg. Observations during the closest approach from 2006 May 11-13 achieved a resolution of 35 km at the nucleus. Both segments clearly depart from a 1/rho surface brightness for the first 50 - 200 km from the nucleus. Simulations of radiation driven dust dynamics can reproduce some of the observed coma morphology, but only with a wide distribution of initial dust velocities (at least a factor of 10) for a given grain radius. Grain aggregate breakup and fragmentation are able to reproduce the observed profile perpendicular to the Sun-Comet axis, but fit the observations less well along this axis (into the tail). The required fragmentation is significant, with a reduction in the mean grain aggregate size by about a factor of 10. A combination of the two processes could possibly explain the surface brightness profile of the comet.