Display issues on IBM ThinkPad

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I am running Win XP Pro on an IBM ThinkPad T42. The machine is
relatively new, lean and clean, with very few extra programs,
etc...running on the system.

The following display problem began to occur last week: After the
machine has been idle and has entered its screen saver mode (or if I
have manually put the system into standby mode) I cannot exit from the
screen saver/standby without the system first launching the
"full-screen magnifier" feature that is normally activated on a
ThinkPad by pressing the function key/spacebar combination.

When I tap the navigation pad or push any key, the machine will lock
itself into a 640x480 fully magnified screen resolution that I cannot
reverse by pressing the function key/spacebar combination (when I do
that, the "screen magnifier" icon flashes on the system tray but
does not actually change the screen size).

I must either manually go back and change the resolution from the
control panel or wait until after I power down and restart the machine,
at which point a warning balloon pops up on the system tray alerting me
with something to the effect of "your screen resolution and color
screen are set to very low levels...click here to have Windows
reconfigure these settings." Then everything is fine again-until
the next time the system powers down into standby or screen saver.

So far I have scanned the hard drive (no errors), run several
third-party spyware/adware removal programs (nothing found),
reinstalled the display driver from the IBM site (no change) and also
disabled the screen saver function (no luck with that either).

IBM tech support has suggested that I wipe the hard drive clean and
reinstall the operating system, which sounds a bit drastic.

Any ideas or a point in the right direction would be greatly

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