I had the same problem. I'm not really a Linux pro, so I'll just tell you what I did:
Try using the following metamode line:
option "MetaModes" "1024x768,1024x768"
Don't worry... My TV supports 1024x768 resolution only as well. But with the 4496 drivers of nvidia it seems to work very well.
I don't give a guarantee that this will work, but it worked for me, so you should give it a try. The worst thing that could possibly happen is that you don't get any TV-OUT. In that case, just undo the changes you've made.
If it works and you can't switch back to a terminal session, look at this
Hope I could help.