I am having the same problem, and yes in my situation the Xbox displays perfectly on any other TV or smaller monitor.
I did some research on my own and it appears that the HP LP3065 30" display does not have a built in resolution scaler. What this means is that the native resolution of the monitor (2560x1600) is the only input resolution that it will accept from a non-scaled source (an xbox outputting at a lower resolution). This leads me to my next question for the board: Is there a way to compensate for the non-native resolution output of the xbox? For example, is there some component I can install between the xbox and the monitor to automatically scale down or scale up the resolution so that it's compatible with that monitor?
Thanks for any input, advice, or guidance.
EDIT: After some further research, apparently the LP3065 does have a built in scaler but it is a simple one and is only capable of doubling the video input. Therefore, an xbox outputting at 1280x800 with a single-link DVI-D cable might do the trick. Note I have not tested this myself yet, but it seems feasible.