To begin troubleshooting this problem, please ensure that you are running the latest version of the Intel(R) Graphics Driver:
If the problem persists, please go to Options and Support > Information Center, and provide us with the system report.
It seems the problem was due to the convertor cable. I tried Powerstrip for custom resolution, it didn't work. But, when I created a custom resolution using the tool provided by Intel on the MB CD, it worked fine. Now the display is perfect.