Just FYI. Same problem happened to me early today after installing MX-17 32-bit with stock kernel, using an Asus P5KPL-CM board (don’t know if BIOS was ever flashed), with 4GB good ram, an older Planar PL1700M monitor, and NVS300 card. I used MX-17’s nvidia installer, which installed 340.107 from backports. Install ran fine and quick. However, I could only get 640x480 or 320x240. I tried a lot of things I found online, including some suggestions here, but nothing fixed it. Finally, I tried what the O.P. mentioned about running with no xorg.conf. Voila! I could get all the resolutions! The only thing I couldn’t do was save the resolution setting in nvidia-settings, because there was no config file to save to. To make the change permanent I adjust resolution in xfce4-display-settings. Not sure how it can run without xorg.conf, but so it does for me.
NOTE: On my first install on this board a couple of months ago, using an 8400GS (with 2 vga outs), same thing happened. At that time, I then deleted everything NVIDIA through Synaptic, along with xorg.conf. Then I installed using sgfxi. That worked. However, I didn’t want to repeat that this time, since I wanted to try to get the MX-17 nvidia install working properly.