No signal on external monitor but xrandr reports it is on

Binary package hint: xorg

I am running Xubuntu 10.10 (also tried with Ubutnu 10.10). I can't make any external monitor working. Only when I switch to console (Ctrl+Alt+F1), the external monitor nicely mirrors my laptop screen. But when I return back (Alt+F7) the external monitor looses the signal again. I tried many options with xrandr command, trying to set lower resolutions, switch off primary display..., but without any success. xrandr even reports that the monitor is on and uses correct resolution (I see * next to it). The same problem I had with previous Ubuntu release(s).

My configuration is:
Thinkpad Lenovo Z60m
ATI Technologies Inc M24 1P [Radeon Mobility X600]

I have no /etc/X11/xorg.conf file.

ProblemType: Bug
DistroRelease: Ubuntu 10.10
Package: xorg 1:7.5+6ubuntu3
ProcVersionSignature: Ubuntu 2.6.35-23.36-generic 2.6.35.7
Uname: Linux 2.6.35-23-generic i686
Architecture: i386
DRM.card0.LVDS.1:
 status: connected
 enabled: enabled
 dpms: On
 modes: 1680x1050 1680x1050 1400x1050 1280x1024 1440x900 1280x960 1280x854 1280x800 1280x720 1152x768 1024x768 800x600 848x480 720x480 640x480
 edid-base64: AP///////wAkTYcoAAAAAAAPAQOAIRV4CrylmFhViygkUFQAAAABAQEBAQEBAQEBAQEBAQEBqC+Q4GAaEEAgQBMAS88QAAAZtyeQ4GAaEEAgQBMAS88QAAAZAAAADwCzCjKzCigUAQAyDAAAAAAA/gBMUDE1NFcwMi1UTDA2AH8=
DRM.card0.VGA.1:
 status: connected
 enabled: disabled
 dpms: Off
 modes: 1680x1050 1680x1050 1280x1024 1280x1024 1440x900 1440x900 1280x960 1152x864 1024x768 1024x768 832x624 800x600 800x600 800x600 640x480 640x480 720x400
 edid-base64: AP///////wAebWpWrC8AAAISAQNqMSB46q7FoldKnCUSUFSna4CVD5UAgYCBQHFPAQEBAQEBfC6QoGAaHkAwIDYA2igRAAAaITmQMGIaJ0BosDYA2igRAAAcAAAA/QA4SxxTDwAKICAgICAgAAAA/ABMMjI2VwogICAgICAgAGE=
Date: Thu Oct 28 16:06:02 2010
MachineType: IBM 2529FKG
PccardctlIdent:
 Socket 0:
   no product info available
PccardctlStatus:
 Socket 0:
   no card
ProcCmdLine: BOOT_IMAGE=/vmlinuz-2.6.35-23-generic root=UUID=2afc685d-1228-4093-a04a-8734a35fa1c0 ro quiet splash
ProcEnviron:
 LANGUAGE=en
 PATH=(custom, user)
 LANG=sk_SK.utf8
 SHELL=/bin/bash
SourcePackage: xorg
Symptom: display
dmi.bios.date: 12/20/2005
dmi.bios.vendor: IBM
dmi.bios.version: 77ET54WW (1.14 )
dmi.board.name: 2529FKG
dmi.board.vendor: IBM
dmi.board.version: Not Available
dmi.chassis.asset.tag: No Asset Information
dmi.chassis.type: 10
dmi.chassis.vendor: IBM
dmi.chassis.version: Not Available
dmi.modalias: dmi:bvnIBM:bvr77ET54WW(1.14):bd12/20/2005:svnIBM:pn2529FKG:pvrThinkPadZ60m:rvnIBM:rn2529FKG:rvrNotAvailable:cvnIBM:ct10:cvrNotAvailable:
dmi.product.name: 2529FKG
dmi.product.version: ThinkPad Z60m
dmi.sys.vendor: IBM
system:
 distro: Ubuntu
 codename: maverick
 architecture: i686
 kernel: 2.6.35-23-generic