We describe a 2-D computational model of the optical propagation of coherent light from a laser diode within human skin to better understand the performance of a confocal reflectance theta microscope. The simulation uses finite-difference time domain (FDTD) computations to solve Maxwell's equations in a synthetic skin model that includes melanin, mitochondria, and nuclei. The theta line-scanning confocal microscope configuration experiences more localized decreases in the signal than the confocal common-path point-scanning microscope. We hypothesize that these decreases result from the bistatic imaging configuration, the imaging geometry, and the inhomogeneity of the index of refraction of the skin. All these factors result in the source path having aberrations different than those of the receiver path. The model predicts signal decreases that are somewhat greater than those seen in experiments. New details on the reflection from a spherical object show that imaging with the theta line scanner leads to somewhat different results than would be seen with a common-path point scanner. The model is used to optimize the design of the theta line-scanning confocal microscope.