Sometimes technology is totally frustrating. I spent a couple hours today fighting with my monitor and power at my desk. The external monitor, a Dell 2405, kept flashing "can not display this mode" as though my laptop was sending a bad signal. I searched around and found a lot of posts with others having the same issue.
The best solution I've seen is moving away from the apple adapter, lol. You'd think that with making the best laptop money can buy that Apple would have their external monitor adapter down pat. From what I've seen though this thing dies quickly and costs way to much.
In the end the bandaid I've found was unplugging the monitor from the display adapter while the adapter was plugged into the laptop. This brought up the Dell "Self test feature check" color bar screen. This seems to resets some of the display adapter/external monitor settings and after plugging the monitor back in again it was redetected properly and works again. Note that unplugging the display adapter itself or rebooting did nothing. Bah.
Hopefully it stays working now!