OS X's display preferences files may have corrupted somehow. Especially since it worked before and now it doesn't. That really sounds like a problem with the configuration of the Mac.
In /Library/Preferences is a file called com.apple.windowserver.plist. Navigate your way to it and throw it in the trash. Also, in your main user account (folder with your name on it) under ~/Library/Preferences/ByHost will also be found a file com.apple.windowserver.xxxxxxxxxx.plist where the xxxxx is a hexidecimal string of letters and numbers. Throw that file in the trash, too. Now restart.
When OS X restarts and finds those files missing from their expected location, it creates fresh copies with default values. This will give a clean start with any attached display. Be aware that by throwing out the above files, you will also lose any custom color calibrations you may have performed (assuming you had performed any), so they will have to be redone.
