In this paper, we investigate the blocking characteristics of all-optical WDM (Wavelength-Division Multiplexing) networks under distributed wavelength assignment policies. For assigning wavelengths in a distributed manner, we consider two algorithms: random and locally-most-used algorithm. For a random wavelength assignment policy, we develop new blocking models of unidirectional/bidirectional ring networks based on the M/M/c/c queueing models under uniform/nonuniform traffic conditions. These models are shown to be more accurate than the previous blocking models since our approach considers the large traffic correlation among links in ring networks. We also analyze the blocking performance of the locally-most-used algorithm by comparing with that of the globally-most-used algorithm in fixed routing networks. We show that our analysis models match well with the simulation results in ring and mesh networks. Through the comparison with the previous centralized/distributed algorithms, it is demonstrated that the distributed locally-most-used algorithm is computationally efficient with good blocking performance.