HP Laptop HDMI no longer allowing closed lid

This was all setup and working correctly for the last 4 years. We left on vacation and when we came back found this issue. We can only use computer with lid open now. This is a living room computer and we've always had it closed and viewed on the big screen until now.

The HP laptop starts normally in Vista. The Windows symbol comes up on the HDMI connected LCD-TV, then disappears and the words "Incompatible video signal has been received. Check output device settings."

The only way I can make the laptop show on the TV is if I open the lid and press Function F4 twice to make the lap top send output to a second device as well as the laptop. BUT, this only works if the laptop is also displaying the screen. If I Fn + F4 only one time, which would normally close the laptop monitor and send to the external monitor, nothing shows up on the TV. And if I close the laptop while it is sharing the image, the image disappears from the TV monitor and the error message again appears.

I've already checked/done the following:
1) power settings set to "do nothing" when lid is closed
2) display settings sees both screens as 1
3) system restore to a week ago while in safe mode
4) taken battery out and reboot with power only
5) went into the NVidia panel for setting up multiple monitors. No matter what choice I use it won't display on the TV, I just get the same error message. BTW it's an HP Pavillion TV and video card is geforce 9600m gt.

I called HP tech support and of course they wanted to charge me money. They did offer to try the system restore which did not work.

Not sure what else to do. Thanks for any help.