I figured out how to get the native 1280x1024 resolution working with this LCD monitor. The trick is to use

fb1280x1024 xmodule=nv screen=1280x1024

[I have an NVidia card, but I guess that's not the issue really) at the boot prompt. If you use "knoppix" instead of "fb1280x1024", when Xfree uses DDC to autodetect the maximum available resolution, it fails to report 1280x1024 because the current (default) text / fb mode used during the boot process, etc., is 1024x768. So, forcing 1280x1024 at the boot prompt fixes the problem.

"viro" suggested using knoppix-txt, probably for the same reason. This did not work for me, but it may work for other users.

M