Windows – Cannot extend desktop onto second monitor all of the sudden

I have a Dell XPS 8300 on Windows 7 with a NVIDIA GeForce GT 545 graphic card. I also have two Dell St2420L monitors. This computer is almost always on and of course when not in use an screen saver runs.
About a month ago i noticed the computer is shutdown. I thought probably Windows installed some updates and shut itself down or maybe a power outage or something. This week when i tried to power the pc on, you would see the 'Windows Starting' screen and then the main monitor would immediatly go into power saving mode ( second montitor was in power saving mode since i pressed the power key on the pc which has always been like that untill i login into windows ).

I though to myself this is likely a bad automated driver/windows update, so i did a factory reset on the pc. Now i don't have the problem of the main monitor going into power save mode after windows login, but i cannnot extend my desktop to the second monitor.

Windows detect both monitors but as soon as i click on the second monitor in the Screen Resolution section of control panel, and select extend my desktop onto this monitor and press apply, it doesn't actually extend. That do you want to keep changes dialog comes up and and if i see yes, it just goes back to "display on monitor 1 only" option. I can select clone my display and both monitors would work in that mode, and i can display on either of the two monitor just fine, but i need the extend option. Any idea? is my graphic card bad or is it a power supply issue possibly?

I have tried switching the DVI cables between the two monitors with no luck. i have also tried connecting one of the monitors with VGA and the other with DVI and that didn't help either.