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This type of problem is usually caused by a failure of the filter capacitors on the power supply board. The LG L204ws uses the AIP-0156 power supply which is the same board used in many of the LG monitors that were sold around the same time. Here is a link to a repair guide for the LG L226wtq model that used that board. The repair guide as pictures and videos showing how to open the unit and check the filter caps. There are parts lists showing what needs to be replaced too.
That is actually not power saving mode, the flashing power light indicates the power supply is not starting up correctly and keeps shutting down and trying again. This is a very common symptom of a failure of the capacitors on the power supply board. The L1752s uses the AIP0157 power supply board which is the same board the is used in several LG monitors such as the L196WTQ and L194WT. Here is a link to a repair guide for the L196WTQ that shows what capacitors to look for and replace on the power supply board to bring the unit back to life.
Unhook the monitor from the pc. Then go ahead and turn on the monitor. If the same thing happens then its an issue with the monitor and the monitor would have to be replaced. If the monitor turns on after unhooking it from the pc then its an issue with the pc.
For a 3 years old monitor, first place to check will be bad caps in the power supply, open it up and post back so we can guide you further, see example of failed monitors due to bad caps: http://s807.photobucket.com/home/budm/allalbums
jefkare, If unit is still covered by warranty LG (Lucky Goldstar) should replace it! Sure seems like a "switch-mode-power-supply" failure to me. try using unit at a KNOWN GOOD pc to see if problem moves with the monitor. Next, prove that different monitor functions perfectly with your PC. Try reinstalling drivers for LG L227 maybe that will work. Also try setting the screen resolution to a lower setting. Good luck guy. Do a reply if in need of further assistance. Bye for now. 12fixlouie on fixya.
I'm affraid you did about everything you can to find the issue.
Trying to isolate the problem is the best way to come close to a solution eventually. But after all the tests you did, it seems that the monitor itself got a problem.
I dont suggest you to try to fix it yourself, some electrical parts may need to be electrically discharged before being removed from the monitor.
If your monitor is still in waranty, contact LG for support. Otherwise, you could bring it to a local tv/monitor store to see if they can repair it. LG support rep could also give you some advice, maybe they got a certified partner in your area that could take a look at it.
P.S. If your computer is on windows XP it should shut down the usual way just by pressing the power button once. The shutdown will be the same as if you go Start->Shutdown->Shutdown the computer.