ok I will try - doubt that is of any help though. Amazing, a new laptop and it us unusable with external monitors. Maybe I should have picked a Dell :(
Oh WOW - quick update - sorry maybe this has already been mentioned some wherein the 23 page post .
I decided to actually use the virtual trouble shooting assistant. Didn't expect much. But when it suggested to press Win-P to open Presentation tab (when you can choose monitor), I chose 'second screen only', and wow, it shows correct resolution. I switch back the 'extended' and now I had all the monitors resolution options available.
So, solution for me was to Win-P and then switch back.