LCD's generally aren't too happy outside their native resolution. When you do so, and things go weird, that shouldn't to big of a shocker. Also I've never heard positive things about HP monitors for design, especially at 350.00$. I'm not trying to be elitist, but it's just something to keep in mind. It is a cheap monitor, no doubt.
Also, if you go much higher than the resolution you listed, you'll need a video card with Dual-Link DVI ports. If you're resolution goes weird when you raise it UP then maybe that is why?
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