  We study electromagnetically induced transparency of a ladder type
configuration in ultracold atomic gases, where the upper level is an
electronically highly excited Rydberg state. The strong two-body interaction in
the Rydberg state leads to the excitation blockade, where all but one atoms are
shifted out of resonance such that the transmission of the probe light is
affected. We show that molecular coupling in the Rydberg state causes an
effective, two-body dephasing. The presence of the two-body dephasing leads to
a similar blockade effect. Hence the overall blockade effect is enhanced by the
two-body dephasing. Through numerical and approximately analytical
calculations, we find that the transmission is reduced drastically by the
presence of two-body dephasing in the transparent window, which is accompanied
by strong photon-photon anti-bunching. Around the Autler-Townes splitting, the
photon bunching is amplified by the two-body dephasing.
