So here is the fix:
In the directory where your nvidia driver sources reside there is a file os-registry.c. Edit this file making these two changes:
NVreg_SoftEDID = 0;
NVreg_Mobile = 2;
Now compile the driver and everything should work great.
2- get ftp://ftp.poupinou.org/xf42-nv/nv_drv.o.gz (you can also look at
XF86Config-4-nv.bz2 on the same site for a sample config file)
and replace the /usr/X11R6/lib/modules/drivers/nv_drv.o with the
downloaded one