I also have an HP EliteBook 8540w with a Dreamcolor display but the FX880M graphics card. I can get the Nvidia proprietary driver to work but it has some issues described in this thread.
I think these are related to the problems that you are experiencing. The Dreamcolor panel is connected via Internal Display Port and the Nvidia proprietary driver is having some issues with DDC access to the display via Display port.
I was able to get DDC access working using the Nouveau driver but of course that means no accelerated 3D.