This is partially solved.
It seems that linux has trouble with old displays. High resolution (1280x720) display is disabled if the screen is turned on after the linux kernal booted. I have noticed this phenomena on three different computers with Mandriva, Debian and Ubuntu linux.
1. If you're having problems with high resolution on your linux machine, try booting with your screen turned on.
2. Is this a known bug? Is someone dealing with it?