Do you use a VGA cable?
I think you have a bad VGA cable.
That means you use HDMI or DVI which for both means the singal is either on or off. Working or not and they are like a light switch. If you do use HDMI or DVI it is likely a setting in ATI. I would check you refresh rate and set it as high as you can, see if that makes a difference. Other than that it sounds more like a video card hardware issue. So try testing it with a different monitor/screen. (using the same connection if possible)